Given the below information, calculate the amount of tax expense. Assume taxes are paid immediately (with cash).
Note: the statutory rate is assumed to be 35%. You will have to decide whether there is any deferred tax position, given these facts.
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Income
Statement
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Tax Return
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Difference: Temporary
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Revenues
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500
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500
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|
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Expenses
|
- 100
|
- 100
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|
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Depreciation Expense
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- 40
|
- 100
|
60
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Pre-tax Income
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360
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|
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Taxable Income
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|
300
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Statutory Tax Rate
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35%
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35%
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Tax Expense
|
?
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|
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Taxes Paid (Cash)
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|
?
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|
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Deferred Tax
|
|
|
?
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