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Sparrow Corporation reported pretax book income of $5,000,000.During the current year, the reserve for warranties increased by$300,000. In addition, tax depreciation exceeded book depreciationby $400,000. Finally, Sparrow received $50,000 of tax-exemptinterest from municipal bonds. Using a tax rate of 34%, computeSparrow's current income tax expense or benefit.

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Sixta Kovacek
Sixta KovacekLv2
28 Sep 2019

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Price Corporation reported pretax book income of $600,000 in2015. Tax depreciation exceeded book depreciation by $100,000. Inaddition, the reserve for warranties increased by $40,000. Pricehad a net deferred tax liability of $34,000 at the beginning of theyear, representing a net taxable temporary difference of $100,000.During the year, the company's tax rate decreased from 34% to 30%.Compute the Company's current and deferred income tax expense orbenefit for 2015.

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Answer is not $139,400.

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