In 2017, Squirrel Corp

question 94

Multiple Choice

In 2017, Squirrel Corp. recorded book income of $165,000. It has one temporary difference which relates to a $30,000 warranty expense that it recorded for book purposes, and no permanent differences. Squirrel anticipates satisfying this liability equally over the following two years. The current enacted tax rate is 36%. The enacted tax rates for the following years are 2017: 26%, 2018: 31%, 2019: 26% and 2020: 36%, respectively. Under U.S. GAAP, what deferred tax amount should Squirrel Corp. record for this temporary difference?

• A) $8,550
• B) $7,800
• C) $9,300
• D) $10,050

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Definitions:

Perinatal Transmission

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Infected Blood Transfusions

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Post-Exposure Prophylaxis (PEP)

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