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Question
For the year ending December 31, 2011, the RJ Corporation reported book income before taxes of $579,000. During 2011: RJ's book depreciation expense was $25,000 greater than what was allowed for tax purposes due to a reversing difference; RJ accrued $17,750 of warranty expense which is not deductible for tax purposes until 2012; RJ recognized a $29,000 unrealized loss on an investment which is not deductible for tax purposes until the investment is sold; and RJ's book income included municipal bond interest of $19,500. What was the current portion of RJ Corporation's 2011 income tax expense assuming a tax rate of 40%?
A. $252,500
B. $215,100
C. $243,800
D. $232,500
Answer
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