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What should uml report as its income tax expense

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Reference no: EM132810836

Question - For its first year of operations, UML Corporation's reconciliation of pre-tax accounting income to taxable income is as follows:

Pretax accounting income $480,000

Permanent difference (20,000)

460,000

Temporary difference-unearned revenue 80,000

Taxable income $540,000

UML's tax rate is 25%. Assume that no estimated taxes have been paid.

What should UML report as its income tax expense for its first year of operations?

a. $95,000.

b. $115,000.

c. $135,000.

d. $155,000.

Reference no: EM132810836

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