McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 59

Shaw, Inc.reported pre-tax book income of $10,000,000.During the current year, the reserve for bad debts increased by $100,000.In addition, tax depreciation exceeded book depreciation by $200,000.Shaw, Inc.sold a fixed asset and reported book gain of $50,000 and tax gain of $75,000.Finally, the company received $250,000 of tax-exempt life insurance proceeds from the death of one of its officers.Assuming a tax rate of 34%, compute the company's deferred income tax expense or benefit.