Question

Angel Corporation reported pretax book income of $1,018,000. During the current year, the net reserve for warranties increased by $27,700. In addition, tax depreciation exceeded book depreciation by $104,500. Finally, Angel subtracted a dividends received deduction of $28,600 in computing its current year taxable income. Angel's hypothetical tax express in its reconciliation of its income tax expense is:

Answer 1

Answer:

$346,120

Explanation:

Calculation for what Angel's hypothetical tax expense in its reconciliation of its income tax expense is

Using this formula

Tax expense =Pretax book income*Tax rate

Let plug in the formula

Tax expense =$1,018,000*34%

Tax expense =$346,120

Therefore Angel's hypothetical tax expense in its reconciliation of its income tax expense is $346,120