Jogg, Inc, Earns Book Net Income Before Tax of $600,000

question 74

Multiple Choice

Jogg, Inc., earns book net income before tax of $600,000. It puts into service a depreciable asset this year, and its first-year tax depreciation exceeds book depreciation by $120,000. Jogg has recorded no other temporary or permanent book-tax differences. Assuming that the U.S. tax rate is 21%, and that this is Jogg's first year of operations, what is Jogg's balance in its deferred tax asset and deferred tax liability accounts at year-end?

• A) $25,200 and $0.
• B) $0 and $0.
• C) $0 and $25,200.
• D) $25,200 and $25,200.