Discuss what amount should shear report as deferred

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Bear, Inc. began operations in year 1. Included in Shear's year 1 financial statements were bad debt expenses of $1,400 and profit from an installment sale of $2,600. For tax purposes, the bad debts will be deducted and the profit from the installment sale will be recognized in year 2. The enacted tax rates are 30% in year 1 and 25% in year 2. In its year 1 income statement, what amount should Shear report as deferred income tax expense?

Reference no: EM131729812

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