HW question 4

Krause Corporation had pretax book income of $300,000 in 2024. In 2024, one temporary difference originated for Krause. Specifically, Krause had an expense from item B of $100,000 for income tax purposes; for financial reporting (book) purposes in the $100,000 of expense will be recognized as the as follows: $10,000 in 2024, $50,000 in 2025 and $40,000 in 2026. Krause Corporation had pretax book income of $400,000 in 2025. All temporary differences reversed as expected. The income tax rate is 20%. What is the CHANGE in the deferred income tax account for 2025? What is the CHANGE in the deferred income tax account for 2025 ? increase of 12,000 decrease of 6,000 increase of 6,000 decrease of 10,000 increase of 10,000 decrease of 8,000 decrease of 12,000 increase of 8,000