Mozart Inc.’s $98,000 taxable income for 2017 will be taxed at the 35% corporate tax rate....

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Mozart Inc.’s $98,000 taxable income for 2017 will be taxed atthe 35% corporate tax rate. For tax purposes, its depreciationexpense exceeded the depreciation used for financial reportingpurposes by $27,000. Mozart has $45,000 of purchased goodwill onits books; during 2017, the company determined that the goodwillhad suffered a $3,000 impairment of value for financial reportingpurposes. None of the goodwill impairment is deductible for taxpurposes. Mozart purchased a three-year corporate liabilityinsurance policy on July 1, 2017, for $36,000 cash. The entirepremium was deducted for tax purposes in 2017. Required:
1.Determine Mozart’s pre-tax book income for 2017.
2.Determine the changes in Mozart’s deferred tax amounts for2017.
3.Calculate tax expense for Mozart Inc. for 2017.

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Mozart Inc.’s $98,000 taxable income for 2017 will be taxed atthe 35% corporate tax rate. For tax purposes, its depreciationexpense exceeded the depreciation used for financial reportingpurposes by $27,000. Mozart has $45,000 of purchased goodwill onits books; during 2017, the company determined that the goodwillhad suffered a $3,000 impairment of value for financial reportingpurposes. None of the goodwill impairment is deductible for taxpurposes. Mozart purchased a three-year corporate liabilityinsurance policy on July 1, 2017, for $36,000 cash. The entirepremium was deducted for tax purposes in 2017. Required:1.Determine Mozart’s pre-tax book income for 2017.2.Determine the changes in Mozart’s deferred tax amounts for2017.3.Calculate tax expense for Mozart Inc. for 2017.