USE THE INFORMATION GIVEN BELOW TO ANSWER QUESTIONS 47 AND 48.

Assume that Tyre Distributors Inc. prepared the following journal entry on December 31, 2021 relating to a 2021 timing (temporary) difference:

DR Income tax expense- future $29,000

CR Future income tax liability $29,000

They provide you with the following additional information for 2021:

- the tax rate was 25% in 2021 and prior years and the tax rate enacted in 2021 for 2022 and future years is 20%;

- accounting income in 2021 was $700,000;

- on December 31, 2020 the deferred tax liability was $100,000.

[47] The total tax expense (future plus current tax) for 2021 will be

Select one:

a.

$169,000.

b.

$140,000.

c.

$135,000.

d.

$147,750.

e.

None of the above.

[48] Assume for this question only that Tyre Distributors Inc. had current income tax payable in 2021 of $80,000 and there was also a permanent difference in computing taxable income for disallowed meals and entertainment expenses of $32,000. Other facts remain the same as Question 47.

How much was the accounting income or loss for 2021?

Select one:

a.

$433,000.

b.

$465,000.

c.

$288,000.

d.

$207,000.

e.

None of the above.