Question:
Joplin Laminating Corporation reported income before income taxes during the first three quarters and
management’s estimates of the annual effective tax rate at the end of each quarter as shown below:
Required:
Determine the income tax expense to be reported in the income statement in each of the three quarterly
reports.
Answer:
Quarter
First Second Third
Cumulative income before taxes $50,000 $90,000 $190,000
Estimated annual effective tax rate 34% 30% 36%
17,000 27,000 68,400
Less: Income tax reported earlier -0- 17,000 27,000
Tax expense to be reported $17,000 $10,000 $ 41,400
Joplin Laminating Corporation reported income before income taxes during the first three quarters and
management’s estimates of the annual effective tax rate at the end of each quarter as shown below:
Required:
Determine the income tax expense to be reported in the income statement in each of the three quarterly
reports.
Answer:
Quarter
First Second Third
Cumulative income before taxes $50,000 $90,000 $190,000
Estimated annual effective tax rate 34% 30% 36%
17,000 27,000 68,400
Less: Income tax reported earlier -0- 17,000 27,000
Tax expense to be reported $17,000 $10,000 $ 41,400
