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Matt Co. at the end of 2018, its first year of operations, prepared a reconcilation...

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Accounting

Matt Co. at the end of 2018, its first year of operations, prepared a reconcilation between pretax financial income and taxable income as follows: Pretax Financial income = $600,000 Estimated litigation expense = 1,500,000 Taxable income = 2,100,000 Estimated litigation expense of 1,500,000 will be deductible in 2020 when its expected to be paid. The estimated liability for litigation is classified as noncurrent. The income tax rate is 30% for all years. a) What is income tax expense? b) What is the deferred tax asset to be recognizied?

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