Robinson Company had a net deferred tax liability of $34,000 atthe beginning of the year, representing a net taxable temporarydifference of $100,000 (taxed at 34%). During the year, Robinsonreported pretax book income of $400,000. Included in thecomputation were favorable temporary differences of $50,000 andunfavorable temporary differences of $20,000. During the year,Congress reduced the corporate tax rate to 21%. Robinson's deferredincome tax expense or benefit for the current year would be:
| | Net deferred tax benefit of $6,300. |
| | Net deferred tax expense of $6,300. |
| | Net deferred tax benefit of $6,700. |
| | Net deferred tax expense of $6,700. |
Angel Corporation reported pretax book income of $1,000,000.During the current year, the net reserve for warranties increasedby $25,000. In addition, tax depreciation exceeded bookdepreciation by $100,000. Finally, Angel subtracted a dividendsreceived deduction of $25,000 in computing its current year taxableincome. Angel's hypothetical tax expense in its reconciliation ofits income tax expense is:
=
$189,000.
$194,250.
$210,000.
$204,750.
