Question 10:

DETX-0027

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North, Inc. uses the equity method of accounting for its 50% investment in Mill Corp.s common stock. During year 3, Mill reported earnings of $600,000 and paid dividends of $200,000. Assume that: (1) all undistributed earnings of Mill will be distributed as dividends in future periods, (2) the dividends received from Mill are eligible for the 80% dividends received deduction, and (3) Norths income tax rate is 30%. The change in the amount of deferred income tax to be reported by North for year 3 is

	$0
	$12,000
	$24,000
	$60,000