Problem 06-55 (LO 06-2) (Static)

Li Corporation reported pretax book income of $600,000. Tax depreciation exceeded book depreciation by $400,000. Lis beginning book (tax) basis in its fixed assets was $1,900,000 ($1,700,000) and its ending book (tax) basis is $1,800,000 ($1,200,000). In addition, the company received $300,000 of tax-exempt municipal bond interest. The company's prior-year tax return showed taxable income of $50,000. 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.