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Sandhill Corporation prepared the following reconciliation for its first year of operations: Pretax financial income for 2018 $1600000 Tax exempt interest (146000) Originating temporary difference
Sandhill Corporation prepared the following reconciliation for its first year of operations: Pretax financial income for 2018 $1600000 Tax exempt interest (146000) Originating temporary difference (342000) Taxable income $1112000 The temporary difference will reverse evenly over the next 2 years at an enacted tax rate of 40%. The enacted tax rate for 2018 is 28%. What amount should be reported in its 2018 income statement as the deferred portion of income tax expense? $448000 debit $640000 credit $136800 credit $444800 debit
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