Li Corporation reported pretax book income of $725,000. Tax depreciation exceeded book depreciation by $425,000....
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Li Corporation reported pretax book income of $725,000. Tax depreciation exceeded book depreciation by $425,000. Li's beginning book (tax) basis in its fixed assets was $2,025,000 ($1,800,000) and its ending book (tax) basis is $1,925,000 ($1,350,000). In addition, the company received $425,000 of tax-exempt municipal bond interest. The company's prior-year tax return showed taxable income of $58,000. Assuming a tax rate of 21 percent, compute the company's deferred income tax expense or benefit.
Note: Enter all numbers as a positive number and indicate whether a deferred tax expense or a deferred tax benefit.
Answers are not: 105,000, 21,000, 135,870, or 131,250
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