Reference no: EM132008578

Question - Hertz Co. prepared the following reconciliation of its pretax financial statement income to taxable income for the year ended December 31, 2013, its first year of operations:

Pretax financial income $800,000

Nontaxable interest received on municipal securities (30,000)

Estimated warranties not deductible for tax purpose in 2013 50,000

Depreciation in excess of financial statement amount (70 ,000)

Taxable income $750,000

Hertz's tax rate for Year 2013 and for future years is 30%.

(a) In its Year 1 income statement, what amount should Hertz report as income tax expense-current portion?

(b) In its December 31, 2013 balance sheet, what amount should Hertz report as deferred income tax liability/asset?