A company reported income taxes payable of $199,200,a decrease in deferred tax assets of $19,900,and a decrease in deferred tax liabilities of $12,450;therefore book income tax expense equals $191,750.

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Chelsea Hudson · Accepted Answer

Final Answer : False, Explanation :  The calculation of book income tax expense should take into account not only changes in current income taxes payable and deferred tax assets/liabilities but also any changes in the deferred tax valuation allowance. Therefore, we cannot determine the accuracy of the given statement without knowing the change in the deferred tax valuation allowance.

A company reported income taxes payable of $199,200,a decrease in deferred tax assets of $19,900,and a decrease in deferred tax liabilities of $12,450;therefore book income tax expense equals $191,750.

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