Whitman Corporation reported pretax book income of $400,000 in 2016. Book depreciation exceeded tax depreciation by $100,000. In addition, the Company accrued vacation pay of $50,000 that was not deductible until paid in 2017. Whitman has a net operating loss carryforward of $200,000 from 2015. Assuming a tax rate of 34%, compute the Company's deferred income tax expense or benefit for 2016.

Question

Quizplus · Accepted Answer

The Answer of Whitman Corporation reported pretax book income of $400,000 in 2016. Book depreciation exceeded tax depreciation by $100,000. In addition, the Company accrued vacation pay of $50,000 that was not deductible until paid in 2017. Whitman has a net operating loss carryforward of $200,000 from 2015. Assuming a tax rate of 34%, compute the Company's deferred income tax expense or benefit for 2016.

Whitman Corporation Reported Pretax Book Income of $400,000 in 2016