Question
Please help regarding income tax expenses or benefits, please explain calculations: 1-A1. Grand River Corporation reported pretax book income of $670,000. Included in the computation
Please help regarding income tax expenses or benefits, please explain calculations:
1-A1. Grand River Corporation reported pretax book income of $670,000. Included in the computation were favorable temporary differences of $185,000, unfavorable temporary differences of $146,000, and favorable permanent differences of $182,000. The corporation's current income tax expense or benefit would be:
Multiple Choice
- $140,700 tax benefit.
- $163,170 tax expense.
- $132,510 tax benefit.
- $94,290 tax expense.
1-B2. Packard Corporation reported pretax book income of $501,600. Included in the computation were favorable temporary differences of $11,600, unfavorable temporary differences of $101,600, and unfavorable permanent differences of $80,800. The corporation's current income tax expense or benefit would be:
Multiple Choice
- $141,204 tax expense.
- $124,440 tax benefit.
- $122,304 tax expense.
- $105,336 tax benefit.
1-C3. Costello Corporation reported pretax book income of $501,500. During the current year, the reserve for bad debts increased by $8,000. In addition, tax depreciation exceeded book depreciation by $41,500. Finally, Costello received $3,750 of tax-exempt life insurance proceeds from the death of one of its officers. Costello's deferred income tax expense or benefit would be:
Multiple Choice
- $7,035 net deferred tax expense.
- $7,035 net deferred tax benefit.
- $7,785 net deferred tax benefit.
- $7,823 net deferred tax expense.
1-D4. Smith Company reported pretax book income of $408,000. Included in the computation were favorable temporary differences of $51,600, unfavorable temporary differences of $20,800, and favorable permanent differences of $40,800. Smith's deferred income tax expense or benefit would be:
Multiple Choice
- net deferred tax expense of $6,468.
- net deferred tax benefit of $6,468.
- net deferred tax expense of $15,204.
- net deferred tax benefit of $15,204.
1-E5. Marlin Corporation reported pretax book income of $1,005,000. During the current year, the net reserve for warranties increased by $26,000. In addition, book depreciation exceeded tax depreciation by $100,500. Finally, Marlin subtracted a dividends received deduction of $15,500 in computing its current-year taxable income. Marlin's current income tax expense or benefit would be:
Multiple Choice
- $237,615 tax expense.
- $234,360 tax expense.
- $211,050 tax expense.
- $206,693 tax expense.
1-F6. Robinson Company had a net deferred tax liability of $34,544 at the beginning of the year, representing a net taxable temporary difference of $101,600 (taxed at 34 percent). During the year, Robinson reported pretax book income of $401,600. Included in the computation were favorable temporary differences of $51,600 and unfavorable temporary differences of $20,800. During the year, Congress reduced the corporate tax rate to 21 percent. Robinson's deferred income tax expense or benefit for the current year would be:
Multiple Choice
- net deferred tax benefit of $6,468.
- net deferred tax expense of $6,468.
- net deferred tax benefit of $6,740.
- net deferred tax expense of $6,740.
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