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Bonus' statutory tax rates are $21$ percent federal and an average state rate of $5$ percent. Federal income taxes are not deductible in any of the states in which Bonus operates, but state income taxes are a proper federal tax deduction. Because of the deductibility of state taxes for federal, the combined tax rate paid by Bonus is $24\mathrm{.}95\%.(5\%$ state rate $+(1-0\mathrm{.}05)**21\%$ federal rate $=24\mathrm{.}95\%).$ All of the states with which Bonus files income tax returns define taxable income in the same way. Using estimated payments, Bonus pays in full its federal and state income tax liabilities in the book and tax year in which net income occurs.

Bonus has no foreign$-$source income or deductions. No tax rate changes have been enacted that will apply in future years. Bonus does not record a valuation allowance against its deferred tax assets in the current reporting period.

Bonus holds only one carryforward to this tax year, for a state and federal NOL. Every year, there also is an amount for book cost of goods sold that are added to the UNICAP balance.

Your Task

Your task is to convert the trial balance into a worksheet that calculates both the current state and federal tax payable, and the total tax provision for Bonus. To do this you will utilize the book trial balance that is presented below.

Bonus Corporation

Condensed Trial Balance $($in $ million$)$ Year Ending $12/31/23$

$\backslash$table$[[$Revenues$,,,],[$Sales$,4,900,,],[$COGS$,2,700,,],[$Gross Profit,,$2,200,],[,,,],[$Expenses$],[$Addition to bad debt reserves,$50,,\backslash$table$[[$Note: Specific accounts written off amounted$],[$to $20]]],[$Advertising$,70,,$Note: Includes lobying costs of $5],[$Depreciation$,95,,$MACRS would have allowed $135],[$Fines paid,$55,,],[$Legal and accounting services,$175,,5],[$Meals $($in full$),60,,],[$Salaries$,$ Wages, Benefits,$750,,],[$Taxes $-$ Sales, Property, Etc.,$110,,],[$Utilities$,40,,],[$Employee vacation accrued,$90,,$Note: Vacation time used of $75],[$Total Expenses,,$1,495,],[$Book Net Income $($Pre$-$Tax$),,705,2]]$

Additional Notes:

Federal and State NOL carryover from $2021$ of $$75$ million.

Book cost of goods sold that would be added to inventory for UNICAP purposes of $$190$ million.

Bonus Corporation

Provision for Income Tax Calculation

Tax Year $2023$

$\backslash$table$[[$Item$,$Amount,$\backslash$table$[[$Temp$.],[$Diff$.]],\backslash$table$[[$Perm$.],[$Diff$.]],$Notes$],[$Pre$-$Tax Net Income,$705,,,],[,,,,],[$Book$-$tax differences, current tax payable$],[$UNICAP$,190,190,,],[$NOL Carryforward$],[$Bad Debts$],[$Depreciation$],[,,,,],[,,,,+1],[,,,,=$

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