Lynch Company Had a Net Deferred Tax Asset of $68,000

question 75

Multiple Choice

Lynch Company had a net deferred tax asset of $68,000 at the beginning of the year, representing a net taxable temporary difference of $200,000. During the year, Lynch reported pretax book income of $800,000. Included in the computation were favorable temporary differences of $20,000 and unfavorable temporary differences of $50,000. During the year, the company's tax rate decreased from 34% to 30%. Lynch's deferred income tax expense or benefit for the current year would be:

• A) Net deferred tax expense of $9,000.
• B) Net deferred tax expense of $1,000.
• C) Net deferred tax benefit of $1,000.
• D) Net deferred tax benefit of $9,000.

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Definitions:

Repression

A psychological defense mechanism where unacceptable thoughts, memories, or feelings are unconsciously blocked from conscious awareness.

Retrograde Amnesia

A form of amnesia where an individual loses pre-existing memories to some extent, losing access to information that occurred before a specific event or time.

DSM-IV

The Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition, a handbook used by healthcare professionals as the authoritative guide to the diagnosis of mental disorders.

Psychological Disorders

A wide range of mental health conditions that affect mood, thinking, and behavior, often diagnosed based on specific criteria.