Question

Mitchell corporation had income before income taxes of $195,000 in 2025. mitchell’s current income tax expense is $24,000, and deferred income tax expense is $15,000. prepare mitchell’s 2025 income statement, beginning with "income before income taxes."

Answer 1

Mitchell Corporation's income statement for 2025 starts with income before income taxes of $195,000. After subtracting current income tax expense of $24,000 and deferred income tax expense of $15,000, the net income for the year would be $156,000.

Step-by-step explanation:

Mitchell Corporation's income before income taxes was $195,000 in 2025. The company's current and deferred income tax expenses are separate entities; the former is $24,000 for the immediate tax period, whereas the latter is expected to be $15,000, possibly attributable to future tax periods.

Here is how the income statement would look:

• Income Before Income Taxes: $195,000
• Current Income Tax Expense: ($24,000)
• Deferred Income Tax Expense: ($15,000)
• Net Income: $156,000

The calculation for the net income takes into account the subtraction of both the current and deferred income tax expenses from the income before taxes. Therefore, the final net income would be $156,000 after accounting for these deductions.

The above presumes that there are no other types of expense or comprehensive income adjustments that need to be made beyond what was presented in the question. Additionally, it operates under the assumption that the deferred tax expense is a genuine expense for the period and not a reversal or benefit.