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Alexandria has also requested that you compute the income tax provision for Florida Chocolate Inc. as of December 31, 20x3. The companys income statement for 20x3 is provided below:

Florida Chocolate Inc.
Statement of Operations
					at December 31, 20x3
Net sales					$20,000,000
Cost of sales					12,000,000
Gross profit					8,000,000
Compensation					500,000
Selling expenses					750,000
Depreciation and amortization					1,250,000
Other expenses					1,000,000
Total operating expenses					3,500,000
Income from operations					$4,500,000
Interest and other income					25,000
Income before income taxes					$4,525,000

You have identified the following permanent differences:

Interest income from municipal bonds $10,000

Nondeductible stock compensation 5,000

Nondeductible fines 1,000

Florida Chocolate Inc. prepared the following schedule of temporary differences from the beginning of the year to the end of the year:

Florida Chocolate Inc.
Temporary Difference Scheduling Template
			BOY	Current		EOY		EOY
Taxable			Deferred	Year		Cumulative		Deferred
Temporary Differences			Taxes	Change		T/D		Taxes
Accumulated depreciation			(1,050,000)	(500,000)		(5,500,000)		(1,155,000)
			BOY		Current		EOY		EOY
Deductible			Deferred		Year		Cumulative		Deferred
Temporary Differences			Taxes		Change		T/D		Taxes
Allowance for bad debts			21,000		10,000		110,000		23,100
Prepaid income			0		20,000		20,000		4,200
Deferred compensation			10,500		10,000		60,000		12,600
Accrued pension liabilities			105,000		100,000		600,000		126,000
Total			136,500		140,000		790,000		165,900

a. Compute Florida Chocolate Inc.s current income tax expense or benefit for 20x3.

b. Compute Florida Chocolate Inc.s deferred income tax expense or benefit for 20x3.

c. Prepare a reconciliation of Florida Chocolate Inc.s total income tax provision with its hypothetical income tax expense of 21 percent in both dollars and rates.

Please use the provided excel template to calculate the below:

A.	Florida Chocolate Inc. current income tax expense or benefit for 20xx
	Income before income taxes
	Interest from municipal bonds
	Nondeductible stock compensation
	Nondeductible fines
	Book equivalent of taxable income
	Net change in cumulative TTD
	Net change in cumulative DTD
	Net change cumulative TD
	Taxable income
	x 21%
	Current tax expense
B.	Chocolate Florida Inc. deferred income tax expense or benefit for 20xx
	Ending balance in TTD
	Beginning balance in TTD
	Increase in deferred tax liability
	Ending balance in DTD
	Beginning balance in TTD
	Increase in deferred tax asset
	Deferred tax expense
	Deferred tax benefit
	Net deferred tax expense
	Tax provision
	Current income tax expense
	Deferred income tax expense
	Total income tax provision
	Check
	Book equivalent of taxable income
	x 21%
	Total income tax provision
C.	Reconciliation of Chocolate Florida Inc. total income tax provision with its hypothetical income tax expense
	Reconciliation of Effective Tax Rate				Dollars		Percent
	Provision at 21%
	Tax exempt interest
	Nondeductible stock compensation
	Nondeductible fines
	Provision

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