Weber Corporation reported pretax book income of $400,000. Included in the computation were favorable temporary differences of $100,000, unfavorable temporary differences of $300,000, and unfavorable permanent differences of $200,000. Compute the company's book equivalent of taxable income. Use this number to compute the company's total income tax provision or benefit.
What will be an ideal response?
BETI of $600,000 and a total income tax provision of $126,000.
| Pretax book income | $ | 400,000 | |
| Unfavorable permanent differences | 200,000 | ||
| Book equivalent of taxable income | $ | 600,000 | |
| × 21% | × 21 | % | |
| Total income tax provision | $ | 126,000 | |
Book equivalent of taxable income takes into account only permanent differences.
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