Pretax accounting income for the year ended December 31, 2016, was $50 million for Truffles Company....
Pretax accounting income for the year ended December 31, 2016, was $50 million for Truffles Company. Truffles' taxable income was $60 million. This was a result of differences between straight-line depreciation for financial reporting purposes and MACRS for tax purposes. The enacted tax rate is 30% for 2016 and 40% thereafter. What amount should Truffles report as the current portion of income tax expense
Homework Answers
The amount of tax due to government authorities for the current period is referred to as current portion of income tax expense. It is calculated by product of current or enacted tax rate and taxable income for the period
Taxable income for 2016 = $60 million
Enacted or current tax rate for 2016 = 30%
Current portion of income tax expense for 2016 = Taxable income x current tax rate = $60 million x 30% = $18 million
Hence Current portion of income tax expense = $18 million
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