Question
Verna Co. reported profit before tax for the six mos. Ended 6/30/2013 at 5,000,000. However the business is seasonal and profit before tax for the
Verna Co. reported profit before tax for the six mos. Ended 6/30/2013 at 5,000,000. However the business is seasonal and profit before tax for the six mos. Ended 12/31/2013 is almost certain to be 9,000,000. Profit before tax equals taxable profit for this entity. The entity operates in a country where income tax is at a rate of 30% if annual profit is below 11,000,000 and a rate of 35% where annual profit exceeds 11,000,000. These tax rates apply to the entire profit for the year. What amount should be reported as income tax expense in the interim FS for the half yr ended 6/30/2013?
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