A)
Income Tax Expense
216,600
Income Tax Payable
171,000
Deferred Tax Asset
45,600
B)
Income Tax Expense
216,600
Income Tax Payable
171,000
Income Tax Contingency
45,600
C)
Income Tax Expense
237,177
Income Tax Payable
171,000
Income Tax Contingency
66,177
D)
Income Tax Expense
323.000
Income Tax Payable
323,000
Answer: B
Explanation: B) Expense: (850,000 × 38%) – (280,000 × 38%). Contingency: (400,000 – 280,000) × 38% = 216,600