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Watson Corporation prepared the following reconciliation for its first year of operations: Pretax financial income for 2015 Tax exempt interest Originating temporary difference Taxable income
Watson Corporation prepared the following reconciliation for its first year of operations: Pretax financial income for 2015 Tax exempt interest Originating temporary difference Taxable income $1,800,000 (100,000) (300,000) The temporary difference will reverse evenly over the next two years at an enacted tax rate of 40%. The enacted tax rate for 2015 is 28%. What amount should be reported in its 2015 income statement as the current portion of its provision for income taxes (i.e., income tax payable)? a. $392,000 b. $560,000 c. $504,000 d. $720,000
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