For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows: Tringali's tax rate is 40%. What should Tringali report as its income tax expense for its first year of operations?

Question

For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows:  Tringali's tax rate is 40%. What should Tringali report as its income tax expense for its first year of operations?

Quizplus · Accepted Answer

The reconciliation schedule shows that Tringali's taxable income is $285,000. Applying a tax rate of 40%, the income tax expense would be $114,000 (40% of $285,000). Therefore, the correct answer is B.

For Its First Year of Operations, Tringali Corporation's Reconciliation of Pretax