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, gross deferred tax assets and liabilities at the beginning of Black's year are listed below.

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 the change in Black's deferred tax liabilities for the current year.

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.
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​
  
Black, Inc.'s, gross deferred tax assets and liabilities at the beginning of Black's year are listed below.
  
​
  
​
  
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 the change in Black's deferred tax liabilities for the current year.

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, gross deferred tax assets and liabilities at the beginning of Black's year are listed below.
  
​
  
​
  
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 the change in Black's deferred tax liabilities for the current year.