Pretax accounting income for the year ended December 31, 2009, was $50 million for Truffles Company. Truffles' taxable income was $60 million. This was a result of differences between straight line depreciation for financial reporting purposes and MACRS for tax purposes. The enacted tax rate is 30% for 2009 and 40% thereafter. What amount should Truffles report as the current portion of income tax expense for 2009?

Question

Quizplus · Accepted Answer

The current portion of income tax expense is calculated based on taxable income. Taxable income is $60 million, and the tax rate for 2009 is 30%. Therefore, the current portion of income tax expense is $60 million * 30% = $18 million.

Pretax Accounting Income for the Year Ended December 31, 2009