Leer Corp.’s pretax income in year 1 was $100,000. The
temporary differences between amounts reported in the financial
statements and the tax return are as follows:
• Depreciation in the financial statements was $8,000
more than tax depreciation.
• The equity method of accounting resulted in financial
statement income of $35,000. A $25,000 dividend was
received during the year, which is eligible for the 80%
dividends received deduction.
Leer’s effective income tax rate was 30% in year 1. In its year 1
income statement, Leer should report a current provision for
income taxes of