Reference no: EM132465951

The following information pertains to Ramesh Company for the current year:

• Book income before income taxes$106,000 Income tax expense 45,500 Income taxes due for this year 28,000 Statutory income tax rate 35%

• The company has one permanent difference and one temporary difference between book and taxable income.

Required:

Question 1: Calculate the amount of temporary difference for the year and indicate whether it causes book income to be more or less than taxable income.

Question 2: Calculate the amount of permanent difference for the year and indicate whether it causes book income to be more or less than taxable income.

Question 3: Provide the journal entry to record income tax expense for the year.

Question 4: Compute the effective tax rate (that is, income tax expense divided by book income before taxes).