Black, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year.Assume a 35% corporate tax rate and no valuation allowance. ?
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 it incurred $500 in nondeductible meals
and entertainment expense.Determine Black's change in net deferred tax asset or net deferred tax
liability for the current year, and provide the journal entry to record this amount.

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 35% corporate tax rate and no valuation allowance.  ?
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 it incurred $500 in nondeductible meals
and entertainment expense.Determine Black's change in net deferred tax asset or net deferred tax
liability for the current year, and provide the journal entry to record this amount.

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 35% corporate tax rate and no valuation allowance.  ?
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 it incurred $500 in nondeductible meals
and entertainment expense.Determine Black's change in net deferred tax asset or net deferred tax
liability for the current year, and provide the journal entry to record this amount.