A taxpayer is headquartered in the U.S. and operates as a CFC in Panama. The company's position is that they are permanently reinvested under APB 23. THE U.S. Tax Rate is 35% and the Panama tax rate is 5%. The requirements to this problem are:

i. Calculate a book to tax by country.

ii. Show the journal entry to record the provision under ASC 740 by country.

iii. Calculate the rate reconciliation by county.

U.S. Panama

PTBI 800,000 50,000

Unfavorable permanent difference 80,000 5,000

Favorable permanent difference 72,000 4,500

Favorable temporary difference 250,000 500

Nonrefundable temporary difference 10,000 25,000

Nonrefundable tax credit 50,0000 1,000