Reference no: EM132952534

Metge Corporation's worksheet for calculating taxable income for 20X1 follows: ($ in thousands)

20X1

Pre-tax income$1,000

Permanent differences:

Goodwill impairment 400

Interest on municipal bonds (200)

Temporary differences:

Depreciation (800)

Warranty costs 400

Rent received in advance 600

Taxable income$1,400

• The enacted tax rate for 20X1 is 21%, but it is scheduled to increase to 25% in 20X2 and subsequent years. All temporary differences are originating differences. Metge had no deferred tax assets or deferred tax liabilities at December 31, 20X0.

Required:

Question 1: Determine Metge's 20X1 taxes due.

Question 2: What is the change in deferred tax assets (liabilities) for 20X1?

Question 3: Determine tax expense for 20X1.

Question 4: Provide a schedule that reconciles Metge's statutory and effective tax rates (in both percentages and dollar amounts) for 20X1.