Problem Set 9 Question 1. Eldor Corporation is a railway and motor carrier with 2012 operating revenues of approximately $4.8 billion. Its financial statements show the following breakdown of income taxes. 2012 2011 Current: Federal $287.8 $282.6 State 41.6 52.7 Total current 329.4 335.3 Deferred: Federal 79.2 57.8 State 17.9 8.9 Total deferred 97.1 66.7 Total 426.5 402.0 a. Provide the journal entry to record income tax expense for 2012. b. Assume that Eldor's effective tax rate in 2012 was 32%, and that $25.0 of interest earned and included in income in 2012 were tax-exempt. What was Eldor's net income for 2012? c. Income taxes payable decreased by $50.0 during 2012. What were Eldor's tax payments during the year?
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To calculate the current income tax expense, we need to add the federal and state current income taxes for 2012. Current income tax expense = Federal current income tax + State current income tax Current income tax expense = $287.8 + $41.6 Current income tax Show more…
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