Packard Corporation reported pretax book income of $500,000. Included in the computation were favorable temporary differences of $10,000, unfavorable temporary differences of $100,000, and unfavorable permanent differences of $80,000. The corporation's current income tax expense or benefit would be:

Question

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The current income tax expense is calculated based on the taxable income, which is the pretax book income adjusted for temporary and permanent differences. The taxable income is $500,000 - $10,000 (favorable temporary differences) + $100,000 (unfavorable temporary differences) - $80,000 (unfavorable permanent differences) = $510,000. Assuming a tax rate of 21%, the current income tax expense is $510,000 * 21% = $107,100. However, none of the provided options exactly match this calculation, suggesting a possible misunderstanding in the question's details or a mistake in the calculation. Given the options, A) $140,700 tax expense is the closest to a standard calculation method, but it does not accurately reflect the correct calculation based on the provided information. This answer is chosen based on the options given, but with a note that the exact calculation does not match any of the options provided.

Packard Corporation Reported Pretax Book Income of $500,000