Question

Pretax accounting income for the year ended December 31, 2021, was $52 million for Truffles Company. Truffles' taxable income was $59 million. This was a result of differences between straight-line depreciation for financial reporting purposes and accelerated depreciation for tax purposes. The enacted tax rate is 24% for 2021 and 34% thereafter. What amount should Truffles report as the current portion of income tax expense for 2021? (Round your answer to the nearest whole million.)

Answer 1

Answer:

$14,160,000

Explanation:

Given that,

Pretax accounting income = $52 million

Taxable income = $59 million

Enacted tax rate = 24% for 2021

Tax rate thereafter = 34%

Current portion of income tax expense is determined by the product of enacted tax rate and Taxable income for the period.

Therefore,

Current portion of income tax expense for 2021:

= Enacted tax rate × Taxable income

= 24% × $59,000,000

= $14,160,000