B-Line Company Reported Pretax Net Income from Continuing Operations of $1,001,000

question 65

Essay

B-Line Company reported pretax net income from continuing operations of $1,001,000 and taxable income of $800,900. The favorable book-tax difference of $200,100 was due to a $100,100 favorable temporary difference relating to depreciation, an unfavorable temporary difference of $50,100 due to accrued vacation pay, and a $150,100 favorable permanent difference from the dividends received deduction.
a. Compute B-Line's current income tax expense.
b. Compute B-Line's deferred income tax expense or benefit.
c. Compute B-Line's effective tax rate.
d. Provide a reconciliation of B-Line's effective tax rate with its hypothetical tax rate of 21 percent.

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Definitions:

Acetylcholine

A neurotransmitter involved in many functions including muscle movement, heart rate, memory, and learning.

Hippocampus

A key region of the brain within the temporal lobe, involved in memory formation and spatial navigation.

Gama-aminobutyric Acid

An amino acid that functions as the major inhibitory neurotransmitter in the brain, regulating nerve cell activity.

Leptin

A hormone produced by fat cells that helps to regulate body weight by signaling the brain to reduce appetite and burn more calories.