As of December 31, 2015, LOL had a deferred tax liability of $80,000 and income...
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As of December 31, 2015, LOL had a deferred tax liability of $80,000 and income tax payable of $20,000. During 2016, LOL paid taxes of $60,000. LOL reported tax expense of $20,000 in their 2016 financial reports and an income tax payable of $30,000. Which of the following statements is true? Please explain.
a. In 2016, LOLs deferred tax liability increased by $30,000
b. In 2016, LOLs deferred tax liability decreased by $40,000
c. In 2016, LOLs deferred tax liability decreased by $50,000
d. In 2016, LOLs deferred tax liability increased by $50,000
e. In 2016, LOLs deferred tax liability decreased by $40,000
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