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Grand Corporation reported pretax book income of $627,500. Tax depreciation exceeded book depreciation by $490,000. In addition, the company received $290,000 of tax-exempt municipal bond
Grand Corporation reported pretax book income of $627,500. Tax depreciation exceeded book depreciation by $490,000. In addition, the company received $290,000 of tax-exempt municipal bond interest. The companys prior-year tax return showed taxable income of $61,000. Compute the companys current income tax expense or benefit.
Solution:
Step 1-
$627,500
$-490,000)
$-290,000)
Total= $-153,000
Step 2
$-153,000 x 21%=
Answer= -32,130
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