Question:On its December 31 Year 2 Balance Sheet, XYZ Company reports a current liability for income tax payable of $180,000. During the year, the company's Deferred Tax Liability account increased by $54,000 based on a tax rate of 40 percent applying to the future period of taxable income. The tax rate for Year 2 was 30 percent.

Given the above information, how did XYZ's book and taxable income relate in Year 2? 

A Book income exceeded taxable income. 
B Taxable income exceeded book income. 
C Book income equaled taxable income. 
D The difference between book income and taxable income is due to a permanent difference. 

+ Answer
C 

+ Explanation
Answer not sure

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Md. Habib Ullah

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