Betta Group just completed its second year of operations and has a deferred tax asset of $75,200 related to a net operating loss of $235,000 from the previous year. In the current year Betta generates $645,000 in revenues and incurs $321,000 in expenses. There are no permanent or temporary book-tax differences. Assuming the same tax rate as last year, what is the tax related journal entry for the current year?

A)
Income Tax Refund Receivable
75,200

Deferred Tax Asset

75,200

B)
Deferred Tax Asset
75,200

Income Tax Benefit

75,200

C)
Income Tax Expense
103,680

Income Tax Payable

28,480
Deferred Tax Asset

75,200

D)
Income Tax Expense
206,400

Income Tax Payable

131,200
Deferred Tax Asset

75,200

Answer: C
Explanation: C) Tax rate: 75,200 / 235,000. Income Tax Expense: 324,000 × 32% = $103,680.