Mitchell Corporation prepared the following reconciliation for 2021, its first year of operations: Pretax financial income for 2021 :900,000 Tax exempt interest: (75,000) Originating Temporary difference:(225,000) Taxable income:600,000 The temporary difference will reverse evenly over the next two years at an enacted tax rate of 40%. The enacted tax rate for 2021 is 35% What amount should be reported in its 2011 income statement as the deferred portion of the income tax expense Select one: O A. $90,000 credit O B. $120,000 debit •O C. $105,000 credit O D. $90,000 debit
Mitchell Corporation prepared the following reconciliation for 2021, its first year of operations: Pretax financial income for 2021 :900,000 Tax exempt interest: (75,000) Originating Temporary difference:(225,000) Taxable income:600,000 The temporary difference will reverse evenly over the next two years at an enacted tax rate of 40%. The enacted tax rate for 2021 is 35% What amount should be reported in its 2011 income statement as the deferred portion of the income tax expense Select one: O A. $90,000 credit O B. $120,000 debit •O C. $105,000 credit O D. $90,000 debit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Mitchell Corporation prepared the following reconciliation for 2021, its first year of operations:
Pretax financial income for 2021 :900,000
Tax exempt interest: (75,000)
Originating Temporary difference:(225,000)
Taxable income:600,000
The temporary difference will reverse evenly over the next two years at an enacted tax rate of 40%.
The enacted tax rate for 2021 is 35%
What amount should be reported in its 2011 income statement as the deferred portion of the income tax expense
Select one:
O A. $90,000 credit
O B. $120,000 debit
•O C. $105,000 credit
O D. $90,000 debit
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