question hertz co prepared the following reconciliation of its pretax financial stat 4284335

Question

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              35,000

Depreciation in excess of financial statement amount                    (30 ,000)

Taxable income                                                                                        $290,000

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?