Irish Corporation reported pretax book income of $1,000,000 in 2017. Included in

Question

Irish Corporation reported pretax book income of $1,000,000 in 2017. Included in the computation were favorable temporary differences of $300,000, unfavorable temporary differences of $100,000, and favorable permanent differences of $200,000. Compute the following items for 2017, assuming a tax rate of 34%.

1-Current income tax expense?

2-Deferred income tax expense?

3-Total income tax expense?

4- Hypothetical income tax provision?

5-Effective tax rate (enter percent with one decimal point, for example 34% would be entered as 34.0) ?

Explanation / Answer

1. Current income tax expense - $1,000,000*34% = $3,40,000

2. Deferred tax expense = $(300000-100000)*34% = $68,000 Favourable

3. Total tax expense = $(340000-68000) = $2,72,000

5. Effective tax rate = 272000/1000000 = 27.2%

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.