Qute, Inc, Earns Book Net Income Before Tax of $500,000

Multiple Choice

Qute, Inc., earns book net income before tax of $500,000. In computing its book income, Qute deducts $50,000 more in warranty expense for book purposes than is allowed for tax purposes. Qute records no other temporary or permanent book-tax differences. Assuming that the U.S. tax rate is 21% and no valuation allowance is required, what is Qute's total income tax expense reported on its GAAP financial statements?

A) $115,500
B) $105,000
C) $94,500
D) $10,500