Question

Foyle Corp. prepared the following reconciliation of income per books with income per tax return for the year ended December 31, 2008: Book income before income taxes $1,200,000 Add temporary difference Construction contract revenue which will reverse in 2009 160,000 Deduct temporary difference Depreciation expense which will reverse in equal amounts in each of the next four years (640,000) Taxable income $720,000 Foyle's effective income tax rate is 34% for 2008. What amount should Foyle report in its 2008 income statement as the current provision for income taxes

Answer 1

$244,800

Step-by-step explanation:

Calculation for the amount that Foyle should report in its 2008 income statement as the current provision for income taxes

Using this formula

Amount to reported =Taxable income*Effective income tax rate

Let plug in the formula

Amount to be reported=($720,000 × 34%)

Amount to be reported = $244,800

Therefore the amount that Foyle should report in its 2008 income statement as the current provision for income taxes should be $244,800