Chris Incorporated has accumulated the following information for its second$-$quarter income statement for $20$X$2$: Chris Incorporated has accumulated the following information for its second$-$quarter income statement for $20\backslash$times $2$:

Additional Information

First$-$quarter income before taxes was $$100,000,$ and the estimated effective annual tax rate was $40$ percent. At the end of the

second quarter, expected annual income is $$600,000,$ and a dividend exclusion of $$30,000$ and a business tax credit of $$15,000$

are anticipated. The combined state and federal tax rate is $50$ percent.

The $$420,000$ cost of goods sold is determined by using the LIFO method and includes $7,500$ units from the base layer at a cost of

$$12$ per unit. However, you have determined that these units are expected to be replaced at a cost of $$26$ per unit.

The operating expenses of $$230,000$ include a $$60,000$ factory rearrangement cost incurred in April. You have determined that the

second quarter will receive about $25$ percent of the benefits from this project with the remainder benefiting the third and fourth

quarters.

Required:

a$.$ Calculate the effective annual tax rate expected at the end of the second quarter for Chris Incorporated.

b$.$ Prepare the income statement for the second quarter of $202.$ Your solution should include a computation of income tax $($or

benefit$)$:

Answer is not complete.

Complete this question by entering your answers in the tabs below.

Req B$2$

Your solution should include a computation of income tax $($or benefit$)$:

Additional Information

First$-$quarter income before taxes was $$100,000,$ and the estimated effective annual tax rate was $40$ percent. At the end of the

second quarter, expected annual income is $$600,000,$ and a dividend exclusion of $$30,000$ and a business tax credit of $$15,000$

are anticipated. The combined state and federal tax rate is $50$ percent.

The $$420,000$ cost of goods sold is determined by using the LIFO method and includes $7,500$ units from the base layer at a cost of

$$12$ per unit. However, you have determined that these units are expected to be replaced at a cost of $$26$ per unit.

The operating expenses of $$230,000$ include a $$60,000$ factory rearrangement cost incurred in April. You have determined that the

second quarter will receive about $25$ percent of the benefits from this project with the remainder benefiting the third and fourth

quarters.

Required:

a$.$ Calculate the effective annual tax rate expected at the end of the second quarter for Chris Incorporated.

b$.$ Prepare the income statement for the second quarter of $20$X$2.$ Your solution should include a computation of income tax $($or

benefit$)$:

Answer is not complete.

Complete this question by entering your answers in the tabs below.

Req A

Req B$2$

Prepare the income statement for the second quarter of $202.$

CHRIS, INCORPORATED

Income Statement

For Three Months Ended June $30,20$X$2$