Wildhorse Corp. prepared the following reconciliation of income per books with i

Question

Wildhorse Corp. prepared the following reconciliation of income per books with income per tax return for the year ended December 31, 2018:
Book income before income taxes $2670000 Add temporary difference Construction contract revenue which will reverse in 2019 237000 Deduct temporary difference Depreciation expense which will reverse in equal amounts in each of the next four years (952800) Taxable income $1954200
Wildhorse's effective income tax rate is 30% for 2018. What amount should Wildhorse report in its 2018 income statement as the current provision for income taxes?

$71100 $586260 $872100 $801000

Explanation / Answer

Wild horse corp. should report a provision for income taxes of 30% on taxable income i.e 30% of $1,954,200 = $586,260 in its 2018 income statement.

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