Calculate the tax expense as recorded on the books

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Reference no: EM133079464

Question - The CFO of Merit Corporation wants to announce earnings.

He knows that earnings Before Taxes amount to $12,900,000.

The statutory tax rate is 28%.

He knows that GAAP EBT and Taxable income will differ for the following reasons.

The Company received $500,000 from key man life insurance.

The Company uses accelerated depreciation for tax purposes and tax depreciation expense was $100,000 more than the books.

The Company got into a zoning dispute that was expensed at $50,000

The Company company's taxes disallow $75,000 in room and meals taxes.

Classify a-b-c-d as a permanent or temporary tax differences.

Calculate the tax expense as recorded on the books?

Calculate the effective tax rate?

Reference no: EM133079464

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