Li Corporation reported pretax book income of $660,000. Tax depreciation exceeded book depreciation by $412,000. Li's beginning book (tax) basis in its fixed assets was $1,960,000 ($1,748,000) and its ending book (tax) basis is $1,860,000 ($1,272,000). In addition, the company received $360,000 of tax-exempt municipal bond interest. The company's prior-year tax return showed taxable income of $49,000. 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. Answer is complete but not entirely correct. Deferred income tax expense $ 65,520
Li Corporation reported pretax book income of $660,000. Tax depreciation exceeded book depreciation by $412,000. Li's beginning book (tax) basis in its fixed assets was $1,960,000 ($1,748,000) and its ending book (tax) basis is $1,860,000 ($1,272,000). In addition, the company received $360,000 of tax-exempt municipal bond interest. The company's prior-year tax return showed taxable income of $49,000. 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. Answer is complete but not entirely correct. Deferred income tax expense $ 65,520
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
vi.3
Transcribed Image Text:Li Corporation reported pretax book income of $660,000. Tax depreciation exceeded book depreciation
by $412,000. Li's beginning book (tax) basis in its fixed assets was $1,960,000 ($1,748,000) and its ending
book (tax) basis is $1,860,000 ($1,272,000). In addition, the company received $360,000 of tax-exempt
municipal bond interest. The company's prior-year tax return showed taxable income of $49,000.
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.
Answer is complete but not entirely correct.
Deferred income tax expense
$
65,520
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education