In 2016, the Puerto Rios Company received insurance proceeds of $300,000 payable upon the death of its previous top executive officer. For financial reporting purposes, Puerto Rios included the $300,000 in pretax accounting income. The life insurance proceeds are exempt from income taxes. Assuming an income tax rate of 35%, what should Puerto Rios report for this event as deferred income taxes in
the 2016 income statement of ?
A) $0
B) $105,000 deferred tax asset
C) $105,000 deferred tax liability
D) $195,000 deferred tax liability
A
Business
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