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7 April, 04:39

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 (taxed at 34 percent). During the year, Weaver reported pretax book income of $400,000. Included in the computation were unfavorable temporary differences of $50,000 and favorable temporary differences of $20,000. At the beginning of the year, Congress reduced the corporate tax rate to 21 percent. Weaver's deferred income tax expense or benefit for the current year would be:

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  1. 7 April, 04:49
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    Deferred Tax Expense=6300

    Less: Tax Adjustment=-13000

    Net Deferred Tax Benefit=6700

    Deferred Tax Expense = (50000-20000) * 21% = $6300

    Tax Adjustment=100000 * (34%-21%) = $13000
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