Black, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year. Assume a 35% corporate tax rate and no valuation allowance.

Black, Inc.'s, gross deferred tax assets and liabilities at the beginning of Black's year are listed below.

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 meals
and entertainment expense. What is Black's total provision for income tax expense reported on its
GAAP financial statement and its book net income after tax?

Question

Black, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year. Assume a 35% corporate tax rate and no valuation allowance.
  
Black, Inc.'s, gross deferred tax assets and liabilities at the beginning of Black's year are listed below.
​
​
  
​
  
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 meals
and entertainment expense. What is Black's total provision for income tax expense reported on its
GAAP financial statement and its book net income after tax?

Quizplus · Accepted Answer

The Answer of Black, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year. Assume a 35% corporate tax rate and no valuation allowance.
  
Black, Inc.'s, gross deferred tax assets and liabilities at the beginning of Black's year are listed below.
​
​
  
​
  
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 meals
and entertainment expense. What is Black's total provision for income tax expense reported on its
GAAP financial statement and its book net income after tax?