B&B Inc.'s taxable income is computed as follows:
Book income before tax $\quad$$\quad$$\quad$ $ 9,882,590
Net permanent differences$\quad$$\quad$$\quad$ 447,600
Net temporary differences $\quad$$\quad$$\quad$(802,100 )
Taxable income $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$ 9,528,090
-B&B's tax rate is 21%. Which of the following statements is true?

Question

Quizplus · Accepted Answer

To calculate the impact of the permanent and temporary differences on deferred tax assets and liabilities, we need to find out the amount of taxable income that is associated with these differences.

Net permanent differences = $447,600
Deferred tax assets = $447,600 x 21% = $93,996

Net temporary differences = ($802,100)
Deferred tax liabilities = ($802,100) x 21% = ($168,441)

So, the correct answer is D. The temporary differences caused a $168,441 net increase in B&B's deferred tax liabilities.

B&B Inc'S Taxable Income Is Computed as Follows: Book Income Before

B&B Inc'S Taxable Income Is Computed as Follows:
Book Income Before