Mitchell Corporation prepared the following reconciliation for its first year of operations:
Pretax financial income for 2011 ....... $900,000Tax 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 2011 is 35%.
A. What amount should be reported in its 2011 income statement as the deferred portion of income tax expense?
$90,000 credit
$105,000 credit
$90,000 debit
$120,000 debit
B. In Mitchell's 2011 income statement, what amount should be reported for total income tax expense?$300,000$330,000$315,000$210,000