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Heron Corporation reported pretax book income of $4,000,000. Included in the computation were favorable temporary differences of $500,000, unfavorable temporary differences of $700,000, and unfavorable permanent differences of $200,000. Using a tax rate of 34%, compute Heron’s current income tax expense or benefit.
Expert Answer
Heron’s current income tax expense or benefit would be:
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Question & Answer: Heron Corporation reported pretax book income of $4,000,000. Included in the computation were favorable…..
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= ($4,000,000 – $500,000 + $700,000 + $200,000) × 34%
= $4,400,000 × 34%
= $1,496,000
