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Li Corporation reported pretax book income of $ 6 3 5 , 0 0 0 . Tax depreciation exceeded book depreciation by $ 4 0

Li Corporation reported pretax book income of $635,000. Tax depreciation exceeded book depreciation by $407,000. Li's beginning book (tax) basis in its fixed assets was $1,935,000($1,728,000) and its ending book (tax) basis is $1,835,000($1,242,000). In addition, the company received $335,000 of tax-exempt municipal bond interest. The company's prior-year tax return showed taxable income of $72,000. Assuming a tax rate of 21 percent, compute the company's deferred income tax expense or benefit.

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