Smith Company reported $350,000 in book income before income tax during 20X1, its first year of operation. The tax depreciation exceeded its book depreciation by $30,000. The tax rate for 20X1 and all future years was 21%.

Income tax expense reported in the income statement for the year ending December 31, 20X1 would be:

Multiple Choice

• a. $67,200.

• b. $73,500.

• c. $79,800.

• d. $52,500.