McGraw-Hill's Taxation of Business Entities 3rd Edition by Connie Weaver, Brian Spilker, Edmund Outslay, John Robinson, Ronald Worsham, Benjamin Ayers, John Barrick

تمرين 70

You have been assigned to compute the income tax provision for Motown Memories, Inc. (MM) as of December 31, 2011. The Company's federal income tax rate is 34%. The Company's Income Statement for 2011 is provided below:
You have identified the following permanent differences:
Interest income from municipal bonds: $50,000
Nondeductible meals and entertainment expenses: $20,000
Domestic production activities deduction: $250,000
Nondeductible fines: $5,000
MM prepared the following schedule of temporary differences from the beginning of the year to the end of the year:

a. Compute MM's current income tax expense or benefit for 2011.b. Compute MM's deferred income tax expense or benefit for 2011.c. Prepare a reconciliation of MM's total income tax provision with its hypothetical income tax expense in both dollars and rates.