Weaver Company had a net deferred tax liability of $35,500 at the beginning of t

Question

Weaver Company had a net deferred tax liability of $35,500 at the beginning of the year, representing a net taxable temporary difference of $100,300. During the year, Weaver reported pretax book income of $401,200. Included in the computation were favorable temporary differences of $50,300 and unfavorable temporary differences of $20,600. During the year, the company's tax rate decreased from 34% to 30%. Weaver's deferred income tax expense or benefit for the current year would be

Net deferred tax benefit of $8,910

Net deferred tax benefit of $4,898

Net deferred tax expense of $4,898

Net deferred tax expense of $8,910

Explanation / Answer

Favorable temporary differences = $50,300

unfavorable temporary differences = $20,600

Net favlurable temporary difference = 29700

company's tax rate for current year = 30%

defferred income tax = 29700* 0.30 = 8910

Less-Last year temporary diffenece = $100300 *34% - 100300*30% = (4012)

current year income tax benefit = $4898

ANSWER = B) Net deferred tax benefit of $4,898

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.