Answer:
Computation of Provision for income tax expense
Particulars Amount
Pre tax financial income $4,800
Add: Non deductible business meal $780
Less: Tax exempt interest -$2,375
Less: Book tax difference in depreciation -$16,800
of building and Furniture & fixtures
Add: Accured litigation expenses <u>$16,000</u>
Taxable Income <u>$2,405</u>
Provision for income tax Expense
Current Tax (21% of $2,405) $505
Deferred tax liability $3,528
Deferred tax asset -<u>$3,360</u>
Total Provision for income tax expense <u>$673</u>
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Computation of book net income after tax
Particulars Amount
Book net income before taxes $4,800
Less: Provision for income tax expense -<u>$673</u>
Net Income after tax <u>$4,127</u>
