Using the facts of Problem 20, determine Mini’s 2021 deferred tax expense, total tax expense, and deferred tax assets and liabilities. In net present value terms, what has been the cost to Mini of the deferred tax deduction for bad debts? Use text Appendix E to calculate your answer.

Data from Problem 20

Mini, in Problem 18, reports $800,000 of pretax book net income in 2021. For that year, Mini did not recognize any bad debt expense for book purposes but did deduct $15,000 in bad debt expense for tax purposes. Mini reports no other temporary or permanent differences. Assuming that the U.S. tax rate is 21%, compute Mini’s current income tax expense.

Data from Appendix E.

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Present Value of $1 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 1 0.9901 0.9709 0.9615 0.9346 0.9259 0.9174 0.9091 0.9009 0.8929 2 0.8734 0.8573 0.8417 0.8264 0.8116 0.7972 0.9804 0.9524 0.9434 0.9803 0.9612 0.9426 0.9246 0.9070 0.8900 0.9706 0.9423 0.9151 0.8890 0.8638 0.8396 0.8163 0.9238 0.8885 0.8548 0.8227 0.7921 0.7629 0.7350 0.7084 0.7938 0.7722 0.7513 0.7312 0.7118 0.6830 0.6587 0.6355 0.9610 0.9515 0.9057 0.8626 0.8219 0.7835 0.7473 0.7130 0.6806 0.6499 0.6209 0.5935 0.5674 0.9420 0.7462 0.7050 0.6663 0.6302 0.5963 0.5645 0.5346 0.5066 0.9327 0.8880 0.8375 0.7903 0.8706 0.8535 0.7894 0.6227 0.5835 0.5470 0.5132 0.4817 0.4523 0.9235 0.8131 0.7599 0.7107 0.6651 0.6274 0.5820 0.5919 0.5439 0.5002 0.7307 0.6768 0.5403 0.5019 0.4665 0.4339 0.4039 0.9143 0.8368 0.7664 0.7026 0.6446 0.4604 0.4241 0.3909 0.3606 0.3220 0.9053 0.8203 0.7441 0.6756 0.6139 0.3522 0.8963 0.8043 0.7224 0.6496 0.5847 0.5584 0.5083 0.4632 0.4224 0.3855 0.5268 0.4751 0.4289 0.3875 0.4440 0.3971 0.3555 0.3505 0.3173 0.2875 12 0.8874 0.7885 0.7014 0.6246 0.5568 0.4970 13 0.8787 0.7730 0.6810 0.6006 0.5303 0.4688 0.4150 0.3677 14 0.8700 0.7579 0.6611 0.5775 0.5051 0.4423 0.3878 0.3405 0.3624 0.3152 0.2745 0.3186 0.2858 0.2567 0.3262 0.2897 0.2575 0.2292 0.2992 0.2633 0.2320 0.2046 0.2394 0.2090 0.1827 0.2176 0.1883 15 0.8613 0.7430 0.6419 0.5553 0.4810 0.4173 16 0.8528 0.7284 0.6232 0.5339 0.4581 0.3936 0.1631 0.3387 0.2919 0.2519 0.3166 0.2703 0.2311 0.1978 17 0.8444 0.7142 0.6050 0.5134 0.4363 0.3714 0.1696 0.1456 18 0.8360 0.7002 0.5874 0.4936 0.2120 0.1799 0.1528 0.1300 19 0.8277 0.4155 0.3503 0.2959 0.2502 0.6864 0.5703 0.4746 0.3957 0.3305 0.2765 0.2317 0.6730 0.5537 0.4564 0.3769 0.3118 0.2584 0.2145 0.1945 0.1635 0.1377 0.1161 20 0.8195 0.1784 0.1486 0.1240 0.1037 N/R 3 4 5 6 7 8 9 10 11