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MariettaO [177]
3 years ago
13

Grand River Corporation reported pretax book income of $620,000. Included in the computation were favorable temporary difference

s of $160,000, unfavorable temporary differences of $106,000, and favorable permanent differences of $152,000. The corporation's current income tax expense or benefit would be___________________.
Business
1 answer:
Alex3 years ago
7 0

Answer:

The corporation's current income tax expense or benefit would be $86,940.

Note: The Internal Revenue Service (IRS) 2019 tax rate of 21% for corporation is used since the tax rate is not given in the question.

Explanation:

Details                                                                Amount ($)

Pretax book income                                             620,000

Favorable temporary differences                       (160,000)    

Unfavorable temporary differences                    106,000

Favorable permanent differences                    <u> (152,000) </u>

Adjusted income                                                  414,000

Tax expenses (at 21%)                                     <u>   (86,940)  </u>

Profit after tax                                                     <u> 327,060   </u>

Therefore, the corporation's current income tax expense or benefit would be $86,940.

Note: The Internal Revenue Service (IRS) 2019 tax rate of 21% for corporation is used since the tax rate is not given in the question.

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