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

question 2

Multiple Choice

Weaver 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.During the year,Weaver 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,the company's tax rate decreased from 34% to 30%.Weaver's deferred income tax expense or benefit for the current year would be:

• A) Net deferred tax benefit of $9,000.
• B) Net deferred tax expense of $9,000.
• C) Net deferred tax benefit of $5,000.
• D) Net deferred tax expense of $5,000.

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Definitions:

Credit Instrument

The evidence of indebtedness.

Promissory Note

A promissory note is a financial instrument in which one party promises in writing to pay a determinate sum of money to another, either at a fixed or determinable future time or on demand of the payee.

Time Draft

A type of credit instrument in international trade where payment is deferred for a specified period after the buyer accepts the draft.

Banker's Acceptance

A short-term financial instrument issued by a company but guaranteed by a bank, commonly used in international trade.