Plutonic Inc had 400 million in taxable income for the curre

Plutonic Inc. had $400 million in taxable income for the current year. tax expense of $80 million. The company is subject to a tax rate of 40%. The change in deferred tax Plutonic also had an increase in deferred tax liabilities of $50 million and recognized assets (ignoring any valuation allowance) was alan Multiple Choice increase of $30 million increase of $130 million decrease of $30 million. decrease of $130 million. Next> KPrev 8 o 1

Solution

In the given question deferred tax liability is $ 50 million i.e we have to pay tax on this amount. At the same time recognized tax expense is $ 80 million i.e we will get credit of this amount.(this amount will be reduced from our taxable income)

So change in deferred tax asset is (-50+80) = Increase of $30 million