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Mitchell Corporation prepared the following reconciliation for its first year of operations: Pretax financial income for 2018 $ 1,800,000 Tax exempt interest (150,000) Originating temporary
Mitchell Corporation prepared the following reconciliation for its first year of operations: Pretax financial income for 2018 $ 1,800,000 Tax exempt interest (150,000) Originating temporary difference (350,000) Taxable income $1,300,000 The temporary difference will reverse evenly over the next two years at an enacted tax rate of 40%. The enacted tax rate for 2018 is 35%. 17. What amount should be reported in its 2018 income statement as the deferred portion of income tax expense? A) $140,000 debit B) $175,000 debit C) $140,000 credit D) $175,000 credit
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