Li Corporation reported pretax book income of $670,000. Tax depreciation exceeded book depreciation by $414,000. Li's beginning book (tax) basis in its fixed assets was $1,970,000 ($1,756,000) and its ending book (tax) basis is $1,870,000 ($1,284,000). In addition, the company received $370,000 of tax-exempt municipal bond interest. The company's prior-year tax return showed taxable income of $42,000. 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 $670,000. Tax depreciation exceeded book depreciation by $414,000. Li's beginning book (tax) basis in its fixed assets was $1,970,000 ($1,756,000) and its ending book (tax) basis is $1,870,000 ($1,284,000). In addition, the company received $370,000 of tax-exempt municipal bond interest. The company's prior-year tax return showed taxable income of $42,000. 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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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