Black, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year. Assume a 21% corporate tax rate and no valuation allowance.

\begin{array}{lrr}&\text { Tax Debit/(Credit) }&\text { Book Debit/(Credit) }\\\text { Assets }\\\text { Cash } & \$ 300 & \$ 300 \\\text { Accounts receivable } & 5,000 & 5,000 \\\text { Buildings } & 300,000 & 300,000 \\\quad \text { Accumulated depreciation } & (150,000) & (80,000) \\\text { Furniture \& fixtures } & 40,000 & 40,000 \\\quad \text { Accumulated depreciation } & \underline{(21,000)} & \underline{(15,000)} \\\text { Total assets } & \underline{\$ 174,300} & \underline{\underline{\underline{\$250,300}}}\\\\\text { Liabilities }\\\text { Accrued litigation expense } & \$-0- & (\$ 27,000) \\\text { Note payable } & \underline{(116,000)} & \underline{(116,000)} \\\text { Total liabilities } & \underline{(\$ 116,000)} & \underline{(\$ 143,000)}\\\\\text { Stockholders' Equity }\\\text { Paid in capital } & (\$ 1,000) & (\$ 1,000) \\\text { Retained earnings } & \underline{(57,300)} & \underline{(106,300)} \\\begin{array}{l}\text { Total liabilities and } \\\text { stockholders' equity }\end{array} & \underline{(\$ 174,300)} & \underline{\underline{(\$ 250,300)}} \\\end{array}

Black, Inc.'s, gross deferred tax assets and liabilities at the beginning of Black's year are as follows:

\begin{array}{lr}&\text { Beginning of Year }\\\text { Accrued litigation expense } & \underline{\$ 20,000} \\\text { Subtotal } & \$ 20,000 \\\text { Applicable tax rate } & \underline{\times 21 \%} \\\text { Gross deferred tax asset } & \underline{\$ 4,200} \\\text { Building - } & \\\quad \text { Accumulated depreciation } &( \$ 61,000)\end{array}

$Black, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year. Assume a 21% corporate tax rate and no valuation allowance. \begin{array}{lrr} &\text { Tax Debit/(Credit) }&\text { Book Debit/(Credit) }\\ \text { Assets }\\ \text { Cash } & \$ 300 & \$ 300 \\ \text { Accounts receivable } & 5,000 & 5,000 \\ \text { Buildings } & 300,000 & 300,000 \\ \quad \text { Accumulated depreciation } & (150,000) & (80,000) \\ \text { Furniture \& fixtures } & 40,000 & 40,000 \\ \quad \text { Accumulated depreciation } & \underline{(21,000)} & \underline{(15,000)} \\ \text { Total assets } & \underline{\$ 174,300} & \underline{\underline{\underline{\$250,300}}}\\ \\ \text { Liabilities }\\ \text { Accrued litigation expense } & \$-0- & (\$ 27,000) \\ \text { Note payable } & \underline{(116,000)} & \underline{(116,000)} \\ \text { Total liabilities } & \underline{(\$ 116,000)} & \underline{(\$ 143,000)}\\ \\ \text { Stockholders' Equity }\\ \text { Paid in capital } & (\$ 1,000) & (\$ 1,000) \\ \text { Retained earnings } & \underline{(57,300)} & \underline{(106,300)} \\ \begin{array}{l} \text { Total liabilities and } \\ \text { stockholders' equity } \end{array} & \underline{(\$ 174,300)} & \underline{\underline{(\$ 250,300)}} \\ \end{array} Black, Inc.'s, gross deferred tax assets and liabilities at the beginning of Black's year are as follows: \begin{array}{lr} &\text { Beginning of Year }\\ \text { Accrued litigation expense } & \underline{\$ 20,000} \\ \text { Subtotal } & \$ 20,000 \\ \text { Applicable tax rate } & \underline{\times 21 \%} \\ \text { Gross deferred tax asset } & \underline{\$ 4,200} \\ \text { Building - } & \\ \quad \text { Accumulated depreciation } &( \$ 61,000) \end{array} Black, Inc.'s, book income before tax is $6,000. Black records two permanent book-tax differences. It earned $250 in tax-exempt municipal bond interest, and it incurred $500 in nondeductible business meals expense. Provide the journal entry to record Black's current tax expense.$ Black, Inc.'s, book income before tax is $6,000. Black records two permanent book-tax differences.
It earned $250 in tax-exempt municipal bond interest, and it incurred $500 in nondeductible business meals expense. Provide the journal entry to record Black's current tax expense.

Owl Corporation (A C Corporation), a Retailer of Children's Apparel

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