1. Compute Acmes current income tax provision for calendar year 20X5. Show all your computations.

The following table summarizes the December 31, 20X4 tax and book basis of Acme Corporation's assets and liabilities for which there are temporary book-tax differences, as well as the related cumulative temporary differences and deferred tax assets or liabilities. December 31, 20X4 Cumulative deductible (taxable) DTA DTL) Tax basis | Book basis | temporary difference | @ 37.3% rate ($1,900,000) ($708,700) $82,060 $41,030 $7.300,000 9,200,000 Depreciable property Start-up expenditi Accrued warranty expenses Note: In 20X4, the blended federal and state statutory tax rate was 37.3% (34% $220,000 $110,000 5% [1-34%) $220,000 S0(S110,000) Acme Corporation reports the following results for calendar year 20X5 .Acme has pre-tax book income of $5 million. Meals and entertainment expenses t otaled $80,000 Book depreciation of $1 million and tax depreciation of $1.5 million. During 20X5, Acme acquired depreciable property with a book and tax basis of S300,000. Acme did not dispose of any existing depreciable property . Tax amortization of start-up expenditures is $20,000 After accounting for the current year warranty expenditures of $100,000 and an end-of-year accrual entry for $170,000 of warranty expenses, the liability for warranty expenses on December 31, 20X5 was $180,000 Acme is eligible to claim a federal Worker Opportunity Tax Credit of $160,000. Due to a limitation, Acme used only $100,000 of the available credits to reduce its 20X5 tax liability. The emaining $60,000 can be carried forward to reduce future tax liabilities. Acme must addback the $160,000 of expenses in computing its 20X5 taxable income Acme operates in several states. The average state tax rate on Acme's income is 5%. For simplicity. assume state taxable income equals federal taxable income before the deduction for state income taxes The applicable federal income tax rate is a flat rate of 34%. Acme is not subject to any foreign income taxes The following table summarizes the December 31, 20X4 tax and book basis of Acme Corporation's assets and liabilities for which there are temporary book-tax differences, as well as the related cumulative temporary differences and deferred tax assets or liabilities. December 31, 20X4 Cumulative deductible (taxable) DTA DTL) Tax basis | Book basis | temporary difference | @ 37.3% rate ($1,900,000) ($708,700) $82,060 $41,030 $7.300,000 9,200,000 Depreciable property Start-up expenditi Accrued warranty expenses Note: In 20X4, the blended federal and state statutory tax rate was 37.3% (34% $220,000 $110,000 5% [1-34%) $220,000 S0(S110,000) Acme Corporation reports the following results for calendar year 20X5 .Acme has pre-tax book income of $5 million. Meals and entertainment expenses t otaled $80,000 Book depreciation of $1 million and tax depreciation of $1.5 million. During 20X5, Acme acquired depreciable property with a book and tax basis of S300,000. Acme did not dispose of any existing depreciable property . Tax amortization of start-up expenditures is $20,000 After accounting for the current year warranty expenditures of $100,000 and an end-of-year accrual entry for $170,000 of warranty expenses, the liability for warranty expenses on December 31, 20X5 was $180,000 Acme is eligible to claim a federal Worker Opportunity Tax Credit of $160,000. Due to a limitation, Acme used only $100,000 of the available credits to reduce its 20X5 tax liability. The emaining $60,000 can be carried forward to reduce future tax liabilities. Acme must addback the $160,000 of expenses in computing its 20X5 taxable income Acme operates in several states. The average state tax rate on Acme's income is 5%. For simplicity. assume state taxable income equals federal taxable income before the deduction for state income taxes The applicable federal income tax rate is a flat rate of 34%. Acme is not subject to any foreign income taxes