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Please Help!!! Motown Memories Inc. Statement of Operations at December 31, 2020 Net sales Cost of sales Gross profit Compensation Selling expenses Depreciation and amortization
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Motown Memories Inc. Statement of Operations at December 31, 2020 Net sales Cost of sales Gross profit Compensation Selling expenses Depreciation and amortization Other expenses Total operating expenses Income from operations Interest and other income Income before income taxes $50,000,000 28,000,000 $22,000,000 $ 2,000,000 1,500,000 4,000,000 500,000 $ 8,000,000 $14,000,000 1,000,000 $15,000,000 You identified the following permanent differences: Interest income from municipal bonds Nondeductible meals Nondeductible fines $ 50,000 $ 20,000 $ 5,000 Taxable Temporary Differences Accumulated depreciation Motown Memories Inc. Temporary Differences Scheduling Template BOY Current Deferred Year Taxes Change $(1,680,000) $(1,000,000) EOY Cumulative T/D $(9,000,000) EOY Deferred Taxes $(1,890,000) Deductible Temporary Differences Allowance for bad debts Reserve for warranties Inventory IRC 5263A adjustment Deferred compensation Accrued pension liabilities Total BOY Deferred Taxes $42,000 21,000 50,400 10,500 630,000 $753,900 Current Year Change $50,000 20,000 60,000 10,000 250,000 $390,000 EOY Cumulative T/D $250,000 120,000 300,000 60,000 3,250,000 $3,980,000 EOY Deferred Taxes $52,500 25,200 63,000 12,600 682,500 $835,800 Required: a. Compute MM's current income tax expense or benefit for 2020. b. Compute MM's deferred income tax expense or benefit for 2020. c. Prepare a reconciliation of MM's total income tax provision with its hypothetical income tax expense of 21 percent in both dollars and rates. a. Compute MM's current income tax expense or benefit for 2020. b. Compute MM's deferred income tax expense or benefit for 2020. c. Prepare a reconciliation of MM's total income tax provision with its hypothetical income tax expense of 21 percent in both dollars and rates. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req A and B Reqc a. Compute MM's current income tax expense or benefit for 2020. b. Compute MM's deferred income tax expense or benefit for 2020. a. Current income tax expense Net deferred tax expense $ 3,016,650 $ 3,144,750 b.Step by Step Solution
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