Reference no: EM132914938

Question - The pretax financial income of WEW Corporation differs from its taxable income throughout each of the two years as follows:

	2019	2020
Pretax financial income	290,000	320,000
Taxable income	180,000	225,000
Tax rate	30%	25%

Pretax financial income for each year includes non-deductible expense of 30,000 (never deductible for tax purposes). The remainder of the difference between pretax financial income and taxable income in each period is due to one depreciation temporary difference. No deferred income taxes existed at the beginning of 2019.

The change in the tax rate to 25% was not enacted until the beginning of 2020.

Required - Based on the information above, answer the following:

1) How much is the increase/decrease in the deferred tax expense as a result of change in tax rate at the beginning of 2020 to the deferred tax expense (a.k.a catch-up adjustment)?

2) What is the total income tax expense for the year ended December 31, 2020?