Black, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year. Assume a 21% 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 Stockholders’ Equity Paid in capital Retained earnings Total liabilities and stockholders’ equity Tax Debit/(Credit) $3005,000300,000(150,000)40,000(21,000)$174,300$−0−(116,000)($116,000)($1,000)(57,300)($174,300) Book Debit/(Credit) $3005,000300,000(80,000)40,000(15,000)$250,300($27,000)(116,000)($143,000)($1,000)(106,300)($250,300) Black, Inc.'s, gross deferred tax assets and liabilities at the beginning of Black's year are as follows: Accrued litigation expense Subtotal Applicable tax rate Gross deferred tax asset Building - Accumulated depreciation Beginning of Year $20,000$20,000×21%$4,200($61,000) 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 business meals expense. Provide the journal entry to record Black's current tax expense.
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Black, Inc.'s, book income before tax is $6,000. Black records two permanent book-tax differences.
