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20. Cold, Inc., reported a $100,000 total tax expense for financial statement purposes in year 1. This 5 0 deferred tax benefit consisted of $90,000
20. Cold, Inc., reported a $100,000 total tax expense for financial statement purposes in year 1. This 5 0 deferred tax benefit consisted of $90,000 in deferred tax assets reduced by a valuation allowance of $40,000. In year 2, Cold reports $600,000 in book net income before tax. Cold records no other permanent or temporary book-tax differences. At the end of year 2, Cold's auditors determine that the existing valuation allowance of $40,000 should be reduced to zero. What is Cold's total tax expense for year 2 9 a.$250,000 b.$126,000 c.$86,000 d.$40,000
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