Li Corporation reported pretax book income of $605,000. Tax depreciation exceeded book depreciation by $401,000. Li's beginning book (tax) basis in its fixed assets was $1,905,000 ($1,704,000) and its ending book (tax) basis is $1,805,000 ($1,206,000). In addition, the company received $305,000 of tax-exempt municipal bond interest. The company's prior-year tax return showed taxable income of $69,000. Assuming a tax rate of 21 percent, compute the company's deferred income tax expense or benefit. Note: Enter all numbers as a positive number and indicate whether a deferred tax expense or a deferred tax benefit.

Li Corporation reported pretax book income of $605,000. Tax depreciation exceeded book depreciation by $401,000. Li's beginning book (tax) basis in its fixed assets was $1,905,000 ($1,704,000) and its ending book (tax) basis is $1,805,000 ($1,206,000). In addition, the company received $305,000 of tax-exempt municipal bond interest. The company's prior-year tax return showed taxable income of $69,000. Assuming a tax rate of 21 percent, compute the company's deferred income tax expense or benefit. Note: Enter all numbers as a positive number and indicate whether a deferred tax expense or a deferred tax benefit.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter17: Corporations: Introduction And Operating Rules

Section: Chapter Questions

Problem 16DQ

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