Question:XYZ Company reports book income of $96,000 and taxable income of $120,000 (the $24,000 difference is attributed to warranty expenses). The statutory tax rate is 30 percent and the company reports a current liability for income taxes payable of $36,000 on its Year 1 Balance Sheet. In its Income Statement, the company reports income tax expense at an effective rate of 37.5 percent. Given the above information, what amount of income tax expense did XYZ Company report in Year 1?
A $36,000
B $21,600
C $17,280
D $33,750
+ AnswerA
+ Explanation
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