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Cardinal Corporation reported pretax book income of $3,000,000. During the current year, the reserve for bad debts increased by $200,000. In addition, book depreciation exceeded
Cardinal Corporation reported pretax book income of $3,000,000. During the current year, the reserve for bad debts increased by $200,000. In addition, book depreciation exceeded tax depreciation by $100,000. Cardinal sold a fixed asset and reported a book gain of $10,000 and a tax gain of $45,000. Cardinal had a net deferred tax asset of $12,600 at the beginning of the year, representing a balance of $60,000 of net temporary unfavorable differences. a. Compute Cardinal's current income tax expense or benefit. b. Compute Cardinal's deferred income tax expense or benefit
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