Grand Corporation reported pretax book income of $805,000. Tax depreciation exceeded book depreciation by $535,000. In addition, the company received $330,000 of tax-exempt municipal bond interest. The company's prior-year tax return showed taxable income of $37,000. Compute the company's current and deferred income tax expense or benefit. (Leave no answer blank. Enter N/A or zero.)

Grand Corporation reported pretax book income of $805,000. Tax depreciation exceeded book depreciation by $535,000. In addition, the company received $330,000 of tax-exempt municipal bond interest. The company's prior-year tax return showed taxable income of $37,000. Compute the company's current and deferred income tax expense or benefit. (Leave no answer blank. Enter N/A or zero.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Grand Corporation reported pretax book income of $600,000. Tax depreciation exceeded book depreciation by $400,000. In addition, the company received $300,000 of tax-exempt municipal bond interest. The company's prior-year tax return showed taxable income of $50,000. Grand's beginning book (tax) basis in its fixed assets was $2,000,000 ($1,800,000) and its ending book (tax) basis is $2,500,000 ($1,900,000). Compute the company's current income tax expense or benefit. Note: Leave no answer blank. Enter N/A or zero. Current income tax Deferred income tax N/A $ expense
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For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows: Pretax accounting income $ 290,000 Permanent difference (15,000 ) 275,000 Temporary difference-depreciation (20,100 ) Taxable income $ 254,900 Tringali's tax rate is 25%. Assume that no estimated taxes have been paid. What should Tringali report as its deferred income tax liability as of the end of its first year of operations? $20,100. $35,100. $5,025. $8,775.
Grand Corporation reported pretax book income of $624, 000. Tax depreciation exceeded book depreciation by $416,000. In addition, the company received $312,000 of tax-exempt municipal bond interest. The company's prior - year tax return showed taxable income of $52,000. Grand's beginning book (tax) basis in its fixed assets was $2,040, 000 ($1,832, 000) and its ending book (tax) basis is $2, 540,000 ($1,924, 000). Compute the company's current income tax expense or benefit. Note: Leave no answer blank. Enter N/A or zero.
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Li Corporation reported pretax book income of $660,000. Tax depreciation exceeded book depreciation by $412, 000. Li's beginning book (tax) basis in its fixed assets was $1,960,000 ($1,748, 000) and its ending book (tax) basis is $1,860,000 ($1, 272, 000). In addition, the company received $360, 000 of tax-exempt municipal bond interest. The company's prior - year tax return showed taxable income of $49,000. Assuming a tax rate of 21 percent, compute the company's deferred income tax expense or benefit.
For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows: Pretax accounting income $220,000 Permanent difference (14,200) 205,800 Temporary difference - depreciation (21,000) Taxable income $ 184,800 Tringali's tax rate is 25 %. Assume that no estimated taxes have been paid. What should Tringali report as its income tax expense for its first year of operations?
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Abbot Corporation reported pretax book income of $500,000. During the current year, the reserve for bad debts increased by $5,000. In addition, tax depreciation exceeded book depreciation by $40,000. Finally, Abbot received $3,000 of tax-exempt life insurance proceeds from the death of one of its officers. Abbot's current income tax expense or benefit would be:
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