Robinson Company Had a Net Deferred Tax Liability of $34,000

question 125

Multiple Choice

Robinson Company had a net deferred tax liability of $34,000 at the beginning of the year, representing a net taxable temporary difference of $100,000 (taxed at 34 percent) . During the year, Robinson reported pretax book income of $400,000. Included in the computation were favorable temporary differences of $50,000 and unfavorable temporary differences of $20,000. During the year, Congress reduced the corporate tax rate to 21 percent. Robinson's deferred income tax expense or benefit for the current year would be:

• A)Net deferred tax benefit of $6,300.
• B)Net deferred tax expense of $6,300.
• C)Net deferred tax benefit of $6,700.
• D)Net deferred tax expense of $6,700.

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