Question

Woodward Corporation reported pretax book income of $1,417,500. Included in the computation were favorable temporary differences of $300,000, unfavorable temporary differences of $106,500, and favorable permanent differences of $192,000. Assuming a tax rate of 34 percent, compute the company’s current income tax expense or benefit. (Amounts to be deducted should be indicated by a minus sign.)

Pre-tax book income
Favorable temporary differences
Unfavorable temporary differences
Favorable permanent differences
Taxable income
Tax rate%

Answer 1

The company’s current income tax expense or benefit is $350,880.

Step-by-step explanation:

Pre-tax book income $ 1417500

Favorable temporary differences -$300000

Unfavorable temporary differences $106500

Favorable permanent differences -$192000

Taxable income $1032000

Current income tax expense ($1032000 x 34%) $350880

Therefore, The company’s current income tax expense or benefit is $350,880.