B&B Inc.'s taxable income is computed as follows. B&B's tax rate is 34%. Which of the following statements is true?

Question

B&B Inc.'s taxable income is computed as follows.  B&B's tax rate is 34%. Which of the following statements is true?

Quizplus · Accepted Answer

Based on the information given in the table, B&B's total deferred tax liabilities decreased by $142,570 due to temporary differences and increased by $130,144 due to permanent differences. Therefore, the net effect of these differences on deferred tax liabilities is an increase of $12,426. Thus, option D is correct: The temporary differences caused a $272,714 net increase in B&B's deferred tax liabilities. None of the other options are correct based on the information provided.

B&B Inc'S Taxable Income Is Computed as Follows