xtra holds only one carryforward to this tax year, for a federal NOL.

Every year, there also is an amount for book cost of goods sold that are added to the unicap balance.

Your present task is to convert the trial balance numbers into a worksheet that calculates both the current federal tax payable, and the total tax provision for Extra this year. The book trial balance has been prepared and is presented in summary form with annotations below.

Assignment

1. Use the trial balance data to construct Extras tax expense (tax provision) for the year. First determine the current tax payable amounts that will be reported on the years tax returns. Then add the deferred tax items to compute the total income tax provision. Use a provided format. Make certain that your classifications of the booktax differences match those that you developed in Part 1.

2. Construct the journal entry to record Extras current and deferred tax expense for the year.