You have been assigned to compute the income tax provision for Tulip City Flowers Inc. TCF
as of December The companys income statement for is provided below:
Net sales $
Cost of sales
Gross profit $
Compensation $
Selling expenses
Depreciation and amortization
Other expenses
Total operating expenses $
Income from operations $
Interest and other income
Income before income taxes $
You identified the following permanent differences:
Interest income from municipal bonds $
Nondeductible stock compensation
Nondeductible fines
TCF prepared the following schedule of temporary differences from the beginning of the year tothe end of the year
see image for detail
Required:
A Compute TCFs deferred income tax expense or benefit for
Prepare a reconciliation of TCFs total income tax provision with its hypothetical income tax expense of percent in both dollars and rates.
