Potter,Inc.reported pretax book income of $5,000,000.During the current year,the reserve for bad debts increased by $100,000.In addition,tax depreciation exceeded book depreciation by $300,000.Potter sold a fixed asset and reported book gain of $60,000 and tax gain of $80,000.Finally,the company received $50,000 of tax-exempt municipal bond interest.Using a tax rate of 34%,compute Potter's deferred income tax expense or benefit.

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The Answer of Potter,Inc.reported pretax book income of $5,000,000.During the current year,the reserve for bad debts increased by $100,000.In addition,tax depreciation exceeded book depreciation by $300,000.Potter sold a fixed asset and reported book gain of $60,000 and tax gain of $80,000.Finally,the company received $50,000 of tax-exempt municipal bond interest.Using a tax rate of 34%,compute Potter's deferred income tax expense or benefit.