Plutonic inc. had $400 million in taxable income for the current year. plutonic also had a decrease in deferred tax assets of $50 million and recognized tax expense of $80 million. the company is subject to a tax rate of 40%.

the change in deferred tax asset was a/an: a. increase of $30 millionb. increase of $130 millionc. decrease of $30 milliond. decrease of $130 million

Deferred tax is increased by $130 million

Explanation:

We have given income = $400 million

Company is subject to a tax rate of 40 %

So tax rate = 40 %

So current Tax = $400×40%= $160 Million

Decrease in deferred tax assets of 50 million result in increase in tax expense

Hence total Tax Expense= $160+$50= $210 Million

But it is given that expense is only $80 million

So change in deferred tax is increases by = $210 - $80 = $130

So deferred tax is increases by $130 million

answer; i believe that the correct answer is (strain);