Angel Corporation reported pretax book income of $1,006,000. During the current year, the net reserve for warranties increased by $25,900. In addition, tax depreciation exceeded book depreciation by $101,500. Finally, Angel subtracted a dividends received deduction of $26,200 in computing its current year taxable income. Angel's hypothetical tax expense in its reconciliation of its income tax expense is:

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abiolataiwo2015 abiolataiwo2015 · Answer 1 · 2020-09-16T03:12:23+02:00

Answer:

$211,260

Explanation:

Calculation for Angel's hypothetical tax expense in its reconciliation of its income tax expense

Using this formula

Angel's hypothetical tax expense=Pretax book income × Tax rate

Let plug in the formula

Angel's hypothetical tax expense=$1,006,000×21%

Angel's hypothetical tax expense=$211,260

Therefore Angel's hypothetical tax expense in its reconciliation of its income tax expense will be $211,260

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