Provo, Inc. has an estimated annual tax rate of 35 percent in the first quarter of 2018. Pretax income for the first quarter was $300,000. At the end of the second quarter of 2018, Provo expects the annual tax rate to be 32 percent because of anticipated tax credits. Pretax income for the second quarter was $350,000. Assume no items in either quarter requiring the net-of-tax presentation.How much income tax expense is recognized in the first quarter of 2018?
A. $96,000.
B. $0.
C. $105,000.
D. $112,000.
E. $26,250.
Answer: C
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