Larson,Inc. ,hopes to report a total book tax expense of $160,000 in the current year.This $160,000 expense consists of $240,000 in current tax expense and an $80,000 tax benefit related to the expected future use of an NOL by Larson.If the auditors determine that a valuation allowance of $30,000 must be placed against Larson's deferred tax assets,what is Larson's total book tax expense?

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Quizplus · Accepted Answer

The total book tax expense is calculated by adding the current tax expense and the valuation allowance, then subtracting the tax benefit. So, $240,000 (current tax expense) + $30,000 (valuation allowance) - $80,000 (tax benefit) = $190,000.