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Prance, Inc. earns book pretax book net income of $800,000 in 2018. Prance acquires a depreciable asset that year, and first-year tax depreciation exceeds book
Prance, Inc. earns book pretax book net income of $800,000 in 2018. Prance acquires a depreciable asset that year, and first-year tax depreciation exceeds book depreciation by $80,000. Prance reported no other temporary or permanent book-tax differences. The relevant U.S tax rate is 21% and Prance earns an after-tax rate of return on capital of 8%. Compute Prance's total income tax expense, current income tax expense and deferred income tax expense.
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