Heron Corporation reported pretax book income of $4,000,000. Included in the computation were favorable temporary differences of $500,000, unfavorable temporary differences of $700,000, and unfavorable permanent differences of $200,000. Compute Heron's current income tax expense or benefit.
What will be an ideal response?
$924,000 current income tax expense.
| Pretax book income | $ | 4,000,000 | |
| Favorable temporary differences | (500,000 | ) | |
| Unfavorable temporary differences | 700,000 | ||
| Unfavorable permanent differences | 200,000 | ||
| Taxable income | $ | 4,400,000 | |
| × 21% | × 21 | % | |
| Current income tax expense | $ | 924,000 | |
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