A is corrent. The tax provision for an interim period is the tax for the year to date (estimated effective rate for the year times year-to-date income) less the total tax provisions reported for previous interim periods. In this case, the requirement is to calculate the tax provision for the first quarter interim income statement. The tax expense is $75,000 ($300,000 × 25%).
B is incorrect. The tax provision for an interim period is the tax for the year to date (estimated effective rate for the year times year-to-date income) less the total tax provisions reported for previous interim periods. In this case, the requirement is to calculate the tax provision for the first quarter interim income statement. The tax expense is $75,000 ($300,000 × 25%).
B is incorrect. The tax provision for an interim period is the tax for the year to date (estimated effective rate for the year times year-to-date income) less the total tax provisions reported for previous interim periods. In this case, the requirement is to calculate the tax provision for the first quarter interim income statement. The tax expense is $75,000 ($300,000 × 25%).
D is incorrect. The tax provision for an interim period is the tax for the year to date (estimated effective rate for the year times year-to-date income) less the total tax provisions reported for previous interim periods. In this case, the requirement is to calculate the tax provision for the first quarter interim income statement. The tax expense is $75,000 ($300,000 × 25%).
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