Item 4

Smith Company reported pretax book income of $415,000. Included in the computation were favorable temporary differences of $53,000, unfavorable temporary differences of $21,500, and favorable permanent differences of $41,500. Smith's deferred income tax expense or benefit would be:

21% tax rate

Multiple Choice

net deferred tax expense of $6,615.

net deferred tax benefit of $6,615.

net deferred tax expense of $15,645.

net deferred tax benefit of $15,645.