You have been assigned to compute the income tax provision for Tulip City Flowers Inc. (TCF) as of December 31, 2018. The companys Income Statement for 2018 is provided below:

Tulip City Flowers Inc.Statement of Operations at December 31, 2018

Net sales$20,000,000

Cost of sales 12,000,000

Gross profit$8,000,000

Compensation$500,000

Selling expenses 750,000

Depreciation and amortization 1,250,000

Other expenses 1,000,000

Total operating expenses$3,500,000

Income from operations$4,500,000

Interest and other income 25,000

Income before income taxes$4,525,000

You identified the following permanent differences:

Interest income from municipal bonds$10,000

Nondeductible stock compensation$5,000

Nondeductible fines$1,000

TCF prepared the following schedule of temporary differences from the beginning of the year to the end of the year:

Tulip City Flowers Inc.

Temporary Difference Scheduling Template

Taxable Temporary Differences

BOY Cumulative T/D

Beginning Deferred Taxes (@ 21%)

Current Year Change

EOY Cumulative T/D

Ending Deferred Taxes (@ 21%)

Accumulated depreciation

(5,000,000)

(1,050,000)

(500,000)

(5,500,000)

(1,155,000)

Deductible Temporary Differences

BOY Cumulative T/D

Beginning Deferred Taxes (@ 21%)

Current Year Change

EOY Cumulative T/D

Ending Deferred Taxes (@ 21%)

Allowance for bad debts

$100,000

$21,000

$10,000

$110,000

$23,100

Prepaid income

0

0

20,000

20,000

4,200

Deferred compensation

50,000

10,500

10,000

60,000

12,600

Accrued pension liabilities

500,000

105,000

100,000

600,000

126,000

Total

$650,000

$136,500

$140,000

$790,000

$165,900

Required:

a. Compute TCFs current income tax expense or benefit for 2018.

b. Compute TCFs total income tax provision for 2018.

c. Prepare a reconciliation of TCFs total income tax provision with its hypothetical income tax expense of 21% in both dollars and rates.

a. Compute TCFs current income tax expense or benefit for 2018.

b. Compute TCFs total income tax provision for 2018.

Req A and B

a.	Current income tax expense: ?
b.	Total income tax provision: ?

c. Prepare a reconciliation of TCFs total income tax provision with its hypothetical income tax expense of 21% in both dollars and rates. (Round your percentage answers to 2 decimal places. Amounts to be deducted should be indicated by a minus sign.)

Req C

Reconciliation of Effective Tax Rate	Dollars	Percent
Tax provision before adjustments			%
Interest from municipal bonds			%
Nondeductible stock compensation			%
Nondeductible fines			%
Income tax provision			%