Lynch Company Had a Net Deferred Tax Asset of $68,408

question 98

Multiple Choice

Lynch Company had a net deferred tax asset of $68,408 at the beginning of the year, representing a net taxable deductible difference of $201,200 (taxed at 34 percent) . During the year, Lynch reported pretax book income of $804,800. Included in the computation were favorable temporary differences of $21,200 and unfavorable temporary differences of $50,600.At the beginning of the year, Congress reduced the corporate tax rate to 21 percent. Lynch's deferred income tax expense or benefit for the current year would be:

• A)Net deferred tax benefit of $6,174.
• B)Net deferred tax expense of $6,174.
• C)Net deferred tax benefit of $32,330.
• D)Net deferred tax expense of $19,982.

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Definitions:

Ally

A person or entity that provides support or assistance, often in a partnership or coalition.

Influence

The ability to influence the personality, growth, or actions of an individual or entity.

Providing Information

The act of giving data or facts to enhance knowledge or understanding.

Setting Norms

The process of establishing acceptable behaviors and expectations within a group or society.