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Costello Corporation reported pretax book income of $500,700. During the current year, the reserve for bad debts increased by $6,400. In addition depreciation exceeded book depreciation by $40,700. Finally, Costello received $3,350 of tax-exempt life insurance proceeds from the death of on Costello's deferred income tax expense or benefit would be:

Costello Corporation reported pretax book income of $500,700. During the current year, the reserve for bad debts increased by $6,400. In addition depreciation exceeded book depreciation by $40,700. Finally, Costello received $3,350 of tax-exempt life insurance proceeds from the death of on Costello's deferred income tax expense or benefit would be:

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Costello Corporation reported pretax book income of $500,700. During the current year, the reserve for bad debts increased by $6,400. In addition, tax depreciation exceeded book depreciation by $40,700. Finally, Costello received $3,350 of tax-exempt life insurance proceeds from the death of one of its officers. Costello's deferred income tax expense or benefit would be: Multiple Choice $7,203 net deferred tax expense. $7,203 net deferred tax benefit. $7,873 net deferred tax benefit. $7,907 net deferred tax expense.
Transcribed Image Text:Costello Corporation reported pretax book income of $500,700. During the current year, the reserve for bad debts increased by $6,400. In addition, tax depreciation exceeded book depreciation by $40,700. Finally, Costello received $3,350 of tax-exempt life insurance proceeds from the death of one of its officers. Costello's deferred income tax expense or benefit would be: Multiple Choice $7,203 net deferred tax expense. $7,203 net deferred tax benefit. $7,873 net deferred tax benefit. $7,907 net deferred tax expense.
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