GT Inc.’s net income before tax on its financial statements was $700,000, and its tax-able income was $810,000. The $110,000 difference is the aggregate of temporary book/tax differences. GT’s tax rate is 34 percent.
a. Compute GT’s tax expense for financial statement purposes.
b. Compute GT’s tax payable.
c. Compute the net increase in GT’s deferred tax assets or deferred tax liabilities (identify which) for the year.