Gravel, Inc., earns book net income before tax of $600,000.Gravel puts into service a depreciable asset this year, and first year tax depreciation exceeds book depreciation by $120,000.Gravel has recorded no other temporary or permanent book-tax differences.Assuming that the U.S.tax rate is 21%, what is Gravel's current income tax expense reported on its GAAP financial statements?

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The current income tax expense reported on GAAP financial statements is calculated using the book net income before tax and the tax rate. Therefore, the current income tax expense for Gravel, Inc. is $600,000 x 21% = $126,000. However, Gravel has a temporary difference with book depreciation being less than tax depreciation. This will create a future taxable amount and a deferred tax liability. As Gravel has not recorded any other temporary or permanent book-tax differences, the current income tax expense is simply the book income tax expense of $126,000. Therefore, the correct choice is C.