Question

Item 1Packard Corporation reported pretax book income of $500,900. Included in the computation were favorable temporary differences of $10,900, unfavorable temporary differences of $100,900, and unfavorable permanent differences of $80,450. The corporation's current income tax expense or benefit would be:Assume 21% as tax percentage$140,984 tax expense.$124,073 tax benefit.$122,084 tax expense.$105,189 tax benefit.

Answer 1

Step-by-step explanation

We need to add a subtract the given differences:

500900 - 10900 + 100900 +80450 = 671,350

Now, we need to compute 21% of 671,350 as shown as follows:

`671350*0.21=140984`

In conclusion, the solution is $140,984 tax expense.