Question

Smith Company reported pretax book income of $417,000. Included in the computation were favorable temporary differences of $53,400, unfavorable temporary differences of $21,700, and favorable permanent differences of $41,700. Smith's deferred income tax expense or benefit would be:

Answer 1

deferred income tax expense 31,700

Step-by-step explanation:

book income 417,000

permanent differences: (41,700)

book taxable income 375,300

temporary difference

favorable (53,400)

unfavorable 21, 700

net (31,700)

Taxable income 343,600

As currently has a favorable difference, when this diffrence balance it will have deferred tax expense in the future for this amounts.