Black, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year.Assume a 35% corporate tax rate and no valuation allowance. Assets Cash Accounts Receivable Buildings Accumulated Depreciation Furniture & Fixtures Accumulated Depreciation Total Assets Liabilities Accrued Litigation Expense Note Payable Total Liabilities Tax Debit/(Credit) $3005,000300,000(150,000)40,000(21,000)$174,300$−0−(116,000)(116,000) Book Debit/(Credit) $3005,000300,000(80,000)(40,000)15,000(15,000)($27,000)($116,000)($143,000) ? Stockholders’ Equity Paid in Capital Retained Earnings Total Liabilities and Stockholders’ Equity ($1,000)(57,300)($174,300)($1,000)(106,300)($250,300) Black, Inc.'s, gross deferred tax assets and liabilities at the beginning of Black's year are listed below. Accrued Litigation Expense Subtotal Applicable Tax Rate Gross Deferred Tax Asset Building - Accumulated Depreciation Furniture & fixtures - Accumulated Depreciation Subtotal Applicable tax rate Gross deferred tax liability Beginning of Year $20,000$20,000×35%$7,000($61,000)(3,000)($64,000)×35%($22,400) ? Black, Inc.'s, book income before tax is $6,000.Black records two permanent book-tax differences. It earned $250 in tax-exempt municipal bond interest, and it incurred $500 in nondeductible meals and entertainment expense.Calculate Black's current tax expense.
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