Mini, Inc., earns pretax book net income of $1,864,000 in 2016. Mini déducted $2

Question

Mini, Inc., earns pretax book net income of $1,864,000 in 2016. Mini déducted $244,400 in bad debt expense for book purposes. This expense is not yet deductible for tax purposes. In 2017, Mini reports $1,957,200 of pretax book net income. Mini did not deduct any bad debt expense for book purposes in 2017 but did deduct $183,300 in bad debt expense for tax purposes. Mini has no other temporary or permanent differences.The applicable US, tax rate is 35%, and Mini earns an after-tax rate of return on capital of 8%. For 2017, compute Mini's total income tax expense, current income tax expense, and deferred income tax expense. If required, round your answers to nearest dollar. a. Current income tax expense b. Deferred income tax benefit c. Total income tax expense

Explanation / Answer

a. Current Income Tax Expense $ 1,957,200 x 35%) $ 685,020 b. Deferred Income Tax Benefit ( $ 183,300 x 35%) 64,155 c. Total Income Tax Expense $ 749,175

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