Question

Company A started their business in the current year and has book (GAAP) income before taxes...

Company A started their business in the current year and has book (GAAP) income before taxes (EBT) of $1.5M. It reports the following book-tax differences: Tax depreciation exceeds GAAP depreciation by $150,000 Life insurance proceeds of 700,000 Unrealized loss on marketable securities of $400,000 Penalties & fines of $50,000 Salaries & wages paid in excess of $1M of $250,000 Assuming a tax rate of 21%, determine the following:

Taxable income:

Current tax liability:

Deferred tax liability or asset:

Income Tax Expense:

Effective tax rate:

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