Question

Pretax accounting income for the year ended December 31, 2021, was $42 million for Truffles Company. Truffles' taxable income was $51 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 25% for 2021 and 35% 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:

$13million

Explanation:

Answer 2

Answer:

The solution is $12.75 million

Explanation: Firstly we need to get the tax for 2021 which is $42 million x25% =$10.5 million

thereafter we know that the income for $42 million was pretax now we are given taxable income for $51 million therefore in this income we have already calculated tax for $42 million therefore the amount that is left to be adjusted for tax is $51 million - $42 million = $9 million then now we will calculate the amount of tax on this amount which will be $9 million x 25% = $2.25 million therefore now we will combine the tax amount above with this tax amount to get the income tax expense for the year=

$10.5 million + $2.25 million = $12.75 million for year 2021.