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    Current Income Tax Payable

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    Frizell Co. at the end of 2007, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows:

    Pretax financial income $ 750,000
    Estimated litigation expense 1,000,000
    Extra depreciation for taxes (1,500,000)
    Taxable income $ 250,000

    The estimated litigation expense of $1,000,000 will be deductible in 2008 when it is expected to be paid. Use of the depreciable assets will result in taxable amounts of $500,000 in each of the next three years. The income tax rate is 30% for all years.

    Current income tax payable is

    a. $0.
    b. $75,000.
    c. $150,000.
    d. $225,000.

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    https://brainmass.com/business/accounting/current-income-tax-payable-260916

    Solution Summary

    The solution explains how to calculate the amount of current income tax payable

    $2.19

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