Use the following information for questions.
Mathis Co.at the end of 2010, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows:

The estimated litigation expense of $1,250,000 will be deductible in 2012 when it is expected to be paid.The gross profit from the installment sales will be realized in the amount of $500,000 in each of the next two years.The estimated liability for litigation is classified as non-current and the installment accounts receivable are classified as $500,000 current and $500,000 noncurrent.The income tax rate is 30% for all years.
-The income tax expense is

Question

Use the following information for questions.
Mathis Co.at the end of 2010, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows:
  
The estimated litigation expense of $1,250,000 will be deductible in 2012 when it is expected to be paid.The gross profit from the installment sales will be realized in the amount of $500,000 in each of the next two years.The estimated liability for litigation is classified as non-current and the installment accounts receivable are classified as $500,000 current and $500,000 noncurrent.The income tax rate is 30% for all years.
-The income tax expense is

Quizplus · Accepted Answer

The income tax expense is $150,000. This is calculated by multiplying the taxable income of $500,000 by the tax rate of 30%.

Use the Following Information for Questions