Information for Kent Corp. for the year 2016: Reconciliation of pretax accountin
ID: 2464731 • Letter: I
Question
Information for Kent Corp. for the year 2016: Reconciliation of pretax accounting income and taxable income:
(14,500)
(13,200)
$153,700
Cumulative future taxable amounts all from depreciation temporary differences:
As of December 31, 2015 $13,800
As of December 31, 2016 $27,000
The enacted tax rate was 23% for 2015 and thereafter.
What should Kent report as the current portion of its income tax expense in the year 2016?
(14,500)
166,900 Temporary difference-depreciation(13,200)
Taxable income$153,700
Explanation / Answer
The current portion of income tax expense to be reported in the year 2016 should be computed by multiplying the taxable income for 2016 by the enacted tax rate.
Taxable income for 2016 = $153,700
Enacted tax rate = 23%
Therefore,
Income tax expense to be reported in the year 2016 = $153700 x 23% = $35,351