Black, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year. Assume a 21% corporate tax rate and no valuation allowance. Black, Inc.'s, gross deferred tax assets and liabilities at the beginning of Black's year are listed below. $\begin{array}{ll}&\text { Beginning of Year }\
\text { Accrued litigation expense } & \$ 20,000 \
\text { Subtotal } & \$ 20,000
\end{array}$

Black, Inc.'s, book income before tax is $6,000. Black records two permanent book-tax differences.
It earned $250 in tax-exempt municipal bond interest and incurred $500 in nondeductible business meals expense. Determine the change in Black's deferred tax liabilities for the current year.

Question

Black, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year. Assume a 21% corporate tax rate and no valuation allowance.  Black, Inc.'s, gross deferred tax assets and liabilities at the beginning of Black's year are listed below. $\begin{array}{ll}&\text { Beginning of Year }\
\text { Accrued litigation expense } & \$ 20,000 \
\text { Subtotal } & \$ 20,000
\end{array}$

Black, Inc.'s, book income before tax is $6,000. Black records two permanent book-tax differences.
It earned $250 in tax-exempt municipal bond interest and incurred $500 in nondeductible business meals expense. Determine the change in Black's deferred tax liabilities for the current year.

Quizplus · Accepted Answer

The Answer of Black, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year. Assume a 21% corporate tax rate and no valuation allowance.  Black, Inc.'s, gross deferred tax assets and liabilities at the beginning of Black's year are listed below. $\begin{array}{ll}&\text { Beginning of Year }\
\text { Accrued litigation expense } & \$ 20,000 \
\text { Subtotal } & \$ 20,000
\end{array}$

Black, Inc.'s, book income before tax is $6,000. Black records two permanent book-tax differences.
It earned $250 in tax-exempt municipal bond interest and incurred $500 in nondeductible business meals expense. Determine the change in Black's deferred tax liabilities for the current year.

Black, Inc Beginning of Year Accrued litigation expense $20,000 Subtotal $20,000\begin{array}{ll}&\text { Beginning of Year }\\\text { Accrued litigation expense } & \$ 20,000 \\\text { Subtotal } & \$ 20,000\end{array} Accrued litigation expense Subtotal ​ Beginning of Year $20,000$20,000​

Black, Inc $\begin{array}{ll}&\text { Beginning of Year }\\\text { Accrued litigation expense } & \$ 20,000 \\\text { Subtotal } & \$ 20,000\end{array}$