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Robinson Company had a net deferred tax liability of $34,340 at the beginning of the year, representing a net taxable temporary difference of $101,000 (taxed
Robinson Company had a net deferred tax liability of $34,340 at the beginning of the year, representing a net taxable temporary difference of $101,000 (taxed at 34%). During the year, Robinson reported pretax book income of $401,000. Included in the computation were favorable temporary differences of $51,000 and unfavorable temporary differences of $20,500. During the year, Congress reduced the corporate tax rate from 34% to 21%. Robinson's deferred income tax expense or benefit for the current year would be:
- Net deferred tax benefit of $6,405.
- Net deferred tax expense of $6,405.
- Net deferred tax benefit of $6,725.
- Net deferred tax expense of $6,725.
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