Yount Inc.’s auditors prepared the following reconciliation between book and taxable income. Yount’s tax rate is 34 percent.
Net income before tax …………………… $378,200
Permanent book/tax differences …………. (33,500)
Temporary book/tax differences …………. 112,400
Taxable income …………………………… $457,100
a. Compute Yount’s tax expense for financial statement purposes.
b. Compute Yount’s tax payable.
c. Compute the net increase in Yount’s deferred tax assets or deferred tax liabilities (identify which) for the year.