Ask Question
27 July, 03:13

Pretax financial income for 2021 $2,700,000 Tax exempt interest (150,000) Originating temporary difference (450,000) Taxable income $2,100,000 The temporary difference will reverse evenly over the next two years at an enacted tax rate of 30%. The enacted tax rate for 2021 is 20%. What amount should be reported in its 2021 income statement as the current portion of?

+5
Answers (1)
  1. 27 July, 03:20
    0
    Income tax for 2021 = $450,000

    Explanation;

    Given the following:

    Pretax income, 2021 = $2,700,000

    interest 2021 = $ (150,000) - Interest are exempted from tax payment

    temporary differences = $450,000

    taxable income = pretax income - (tax exempt interest + temporary differences) =

    Taxable income = $2,700,000 - ($150,000 + 450,000)

    Taxable income = $2,100,000

    current portion of its provision for income taxes = taxable income 2021 x tax rate

    $2,100,000 x 20% = $420,000
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Pretax financial income for 2021 $2,700,000 Tax exempt interest (150,000) Originating temporary difference (450,000) Taxable income ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers