Robinson Company had a net deferred tax liability of $37,000 at the beginning of
ID: 2427359 • Letter: R
Question
Robinson Company had a net deferred tax liability of $37,000 at the beginning of the year, representing a net taxable temporary difference of $103,000. During the year, Robinson reported pretax book income of $403,000. Included in the computation were favorable temporary differences of $53,000 and unfavorable temporary differences of $21,500. During the year, the company's tax rate increased from 34% to 35%. Robinson's deferred income tax expense or benefit for the current year would be:
Net deferred tax expense of $12,055
Net deferred tax benefit of $11,025
Net deferred tax expense of $11,025
Net deferred tax benefit of $12,055
Explanation / Answer
Net Favourable differences = $53000 - 21500
= 31500
There will be a defferd tax benefit
Net Deffered tax benefit = $31500 x 35%
= $1025
Thus answer will be Net deffered atx benefit of $11025
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