Problem 3-42 (LO. 2) Kantner, Inc., is a domestic corporation with the following balance sheet for b

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Problem 3-42 (LO. 2) Kantner, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at t

al reyun eu, vur yvur are we were we Pre-tax book income $50.000 Book-tax adjustments Permanent items Less: tax-exempt income

Problem 3-42 (LO. 2) Kantner, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year. Tax Debit/Credit) Book Debit/Credit) Assets Cash Accounts receivable Buildings Accumulated depreciation Furniture and fixtures $1,000 9,000 850,000 (700,000) 40,000 (10,000) $190,000 $1,000 9,000 850,000 (620,000) 40,000 Accumulated depreciation (8,000) $272,000 Total assets Liabilities SO Accrued warranty expense Note payable (16,000) ($40,000) (16,000) ($56,000) ($16,000) Total liabilities Stockholders' Equity Paid-in capital Retained earnings ($50,000) (124,000) ($190,000) ($50,000) (166,000) (5272,000) Total liabilities and stockholders' equity Assume a 21% Federal corporate tax rate and no valuation allowance. The beginning of the year book-tax basis difference is listed below for the deferred tax asset. Beginning of Year Accrued warranty expense $30,000 The beginning of the year book-tax basis difference are listed below for the deferred tax liabilities. Beginning of Year ($62,000) Building-accumulated depreciation Furniture and fixtures- accumulated depreciation (400) ($62,400) Subtotal In addition to the temporary differences, Kantner reported two permanent differences between book and taxable income. It earned $7,800 in tax-exempt municipal bond interest, and it reported $850 in nondeductible business meals expense. Kantner's book income before tax is $50,000. Compute Kantner's current tax expense. If required, round your answers to the nearest dollar. al reyun eu, vur yvur are we were we Pre-tax book income $50.000 Book-tax adjustments Permanent items Less: tax-exempt income Add: nondeductible business meals Temporary differences Less: building depreciation Less: furniture and fixtures depreciation Add: accrued warranty expenses Taxable income Current tax expense

 
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