Zeff Co. prepared the following reconciliation of its pretax financial
statement income to taxable income for the year ended December
31, year 1, its first year of operations:
Pretax financial income $160,000
Nontaxable interest received on municipal securities (5,000)
Long-term loss accrual in excess of deductible amount 10,000
Depreciation in excess of financial statement amount (25,000)
Taxable income $140,000
Zeff’s tax rate for year 1 is 40%.
In its year 1 income statement, what amount should Zeff
report as income tax expense—current portion?