Mitchell Corporation prepared the following reconciliation for its first year of
ID: 2348445 • Letter: M
Question
Mitchell Corporation prepared the following reconciliation for its first year of operations:Pretax financial income for 2011$900,000
Tax exempt interest(75,000)
Originating temporary difference(225,000)
Taxable income$600,000
The temporary difference will reverse evenly over the next two years at an enacted tax rate of 40%. The enacted tax rate for 2011 is 35%.
What amount should be reported in its 2011 income statement as the deferred portion of income tax expense?
$90,000 credit
$105,000 credit
$90,000 debit
$120,000 debit
In Mitchell's 2011 income statement, what amount should be reported for total income tax expense?
$300,000
$330,000
$315,000
$210,000
Explanation / Answer
$315,000