Mitchell Corporation prepared the following reconciliation for its first year of operations:
- Pretax financial income for 2011$900,000
- Tax exempt interest(75,000)
- Originating temporary difference(225,000)
- Taxable income$600,000
- The temporary difference will reverse evenly over the next two years at an enacted tax rate of 40%. The enacted tax rate for 2011 is 35%.
What amount should be reported in its 2011 income statement as the deferred portion of income tax expense?
- $90,000 credit
- $105,000 credit
- $90,000 debit
- $120,000 debit
In Mitchell's 2011 income statement, what amount should be reported for total income tax expense?
- $300,000
- $330,000
- $315,000
- $210,000