What amount should hertz report as deferred income tax

Reference no: EM13697472

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 $300,000
Nontaxable interest received on municipal securities (15,000)
Estimated warranties not deductible for tax purpose in 2013 30,000
Depreciation in excess of financial statement amount (50 ,000)
Taxable income $265,000

Hertz's tax rate for Year 2013 and for future years is 40%.

(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?

Reference no: EM13697472

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