Harlingen Company reported the following operating results during its first three years of operations: 2010 Pretax operating loss $\quad $$ \$ 30,000 $
2011 Pretax operating loss $\quad $$ \$ 200,000 $
2012 Pretax operating income$ \$ 300,000 $
No permanent or temporary differences occurred during these fiscal periods.Assuming an income tax rate of 30%, Harlingen should report a current income tax liability as of December 31, 2012, in the amount of

Question

Harlingen Company reported the following operating results during its first three years of operations: 2010 Pretax operating loss $\quad $$ \$ 30,000 $
2011 Pretax operating loss $\quad $$ \$ 200,000 $
2012 Pretax operating income$ \$ 300,000 $
 No permanent or temporary differences occurred during these fiscal periods.Assuming an income tax rate of 30%, Harlingen should report a current income tax liability as of December 31, 2012, in the amount of

Quizplus · Accepted Answer

To calculate the current income tax liability, we need to multiply the taxable income by the applicable tax rate.

For the year ended December 31, 2012: 
Taxable Income = $200,000 - $120,000 = $80,000 
Current income tax liability = $80,000 x 30% = $24,000 
However, the company has already made an estimated tax payment of $3,000, so the current income tax liability is $24,000 - $3,000 = $21,000.

Harlingen Company Reported the Following Operating Results During Its First \quad

Harlingen Company Reported the Following Operating Results During Its First $\quad$