Mabuhay Company prepared the following reconciliation of income per book with income per tax return for the year ended December 31, 2006 Book income before tax, 750,000 Add temporary difference: Construction revenue which will reverse in 2007, 100,000 Deduct temporary difference: Depreciation expense which will reverse in equal amounts in each of the next four years, (400,000) Taxable income, 450,000 The income tax rate is 35%. What amount should Mabuhay report in its 2006 income statement as the current provision for income tax? a. 157,500 b. 262,500 c. 297,500 d. 367,500
Mabuhay Company prepared the following reconciliation of income per book with income per tax return for the year ended December 31, 2006 Book income before tax, 750,000 Add temporary difference: Construction revenue which will reverse in 2007, 100,000 Deduct temporary difference: Depreciation expense which will reverse in equal amounts in each of the next four years, (400,000) Taxable income, 450,000 The income tax rate is 35%. What amount should Mabuhay report in its 2006 income statement as the current provision for income tax? a. 157,500 b. 262,500 c. 297,500 d. 367,500
Chapter14: Taxes On The Financial Statements
Section: Chapter Questions
Problem 4BCRQ
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Mabuhay Company prepared the following reconciliation of income per book with income per tax return for the year ended December 31, 2006
Book income before tax, 750,000
Add temporary difference:
Construction revenue which will reverse in 2007, 100,000
Deduct temporary difference:
Taxable income, 450,000
The income tax rate is 35%.
What amount should Mabuhay report in its 2006 income statement as the current provision for income tax?
a. 157,500
b. 262,500
c. 297,500
d. 367,500
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