Reference no: EM132488661

Prince Corporation's partial income statement after its first year of operations is as follows:

Income before income taxes      $3,500,000

Income tax expense

Current                                  $966,000

Deferred                               84,000         1,050,000

Net income                       $2,450,000

Question 1: Prince uses the straight-line method of depreciation for financial reporting purposes and accelerated depreciation for tax purposes. The amount charged to depreciation expense on its books this year was $1,400,000. No other differences existed between book income and taxable income except for the amount of depreciation. Assuming a 30% tax rate, what amount was deducted for depreciation on the corporation's tax return for the current year?

Option a. $1,120,000.

Option b. $1,330,000.

Option c. $1,400,000.

Option d. $1,680,000.