Cardinal Corporation Reported Pretax Book Income of $3,000,000

question 13

Essay

Cardinal Corporation reported pretax book income of $3,000,000. During the current year, the reserve for bad debts increased by $200,000. In addition, book depreciation exceeded tax depreciation by $100,000. Cardinal sold a fixed asset and reported a book gain of $60,000 and a tax gain of $80,000. Finally, Cardinal deducted $50,000 of domestic production activities deduction on its tax return. Compute Cardinal's current income tax expense or benefit.

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Definitions:

Environmental Costs

comprise the negative impacts on the environment, including resource depletion and pollution, which are often not reflected in market prices.

Intact Newspapers

Newspapers that have been preserved without any physical alterations, tears, or significant damage.

Serious Pollutant

Substances that cause pollution and can have significant harmful effects on the environment, human health, or both.

Accumulates

The process of gathering or increasing in quantity over time, often used in the context of data, wealth, or substances.