Leer Corp.’s pretax income in 2006 was $100,000. The temporary differences between amounts reported in the financial statements and the tax return are as follows:
- Depreciation in the financial statements was $8,000 more than tax depreciation.
- The equity method of accounting resulted in financial statement income of $35,000. A $25,000 dividend was received during the year, which is eligible for the 80% dividends received deduction.
Leer’s effective income tax rate was 30% in 2006. In its 2006 income statement, Leer should report a current provision for income taxes of
- $26,400
- $23,400
- $21,900
- $18,600