In 2023, Prance reports $600, 000 of pretax book net income, and the book depreciation exceeds tax depreciation that year by $20,000. Prance reports no other temporary or permanent book - tax differences. The pertinent U.S. Federal corporate income tax rate is 21%, and Prance earns an after - tax rate of return on capital of 8%. For 2023, compute Prance's current income tax benefit or expense for the year.
In 2023, Prance reports $600, 000 of pretax book net income, and the book depreciation exceeds tax depreciation that year by $20,000. Prance reports no other temporary or permanent book - tax differences. The pertinent U.S. Federal corporate income tax rate is 21%, and Prance earns an after - tax rate of return on capital of 8%. For 2023, compute Prance's current income tax benefit or expense for the year.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:In 2023, Prance reports $600, 000 of pretax book net income, and the book
depreciation exceeds tax depreciation that year by $20,000. Prance reports no
other temporary or permanent book - tax differences. The pertinent U.S. Federal
corporate income tax rate is 21%, and Prance earns an after - tax rate of return on
capital of 8%. For 2023, compute Prance's current income tax benefit or expense
for the year.
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