O'Malley Corporation prepared the following reconciliation for its first year of operations:
The temporary difference will reverse evenly over the next two years at an enacted tax rate of 40%. The enacted tax rate for 2008 is 35%.
-In O'Malley's 2008 income statement, what amount should be reported for total income tax expense?

Question

O'Malley Corporation prepared the following reconciliation for its first year of operations:
  The temporary difference will reverse evenly over the next two years at an enacted tax rate of 40%. The enacted tax rate for 2008 is 35%.
-In O'Malley's 2008 income statement, what amount should be reported for total income tax expense?

Quizplus · Accepted Answer

($600,000 × .35) + ($225,000 × .40) = $300,000.

O'Malley Corporation Prepared the Following Reconciliation for Its First Year