Answer:
$41,000
Explanation:
Calculation to determine The current-year's income tax expense amount
First step is to calculate the current tax expense
Current tax expense=$120,000 taxable income × 35% tax rate
Current tax expense=$42,000
Second step is to calculate the deferred income tax liability increased
Deferred income tax liability=$55,000-$50,000
Deferred income tax liability=$5,000
Third step is to calculate the deferred income tax asset increased
Deferred income tax asset=$16,000-$10,000
Deferred income tax asset=$6,000
Now let calculate the current year's income tax expense
Current year's income tax expense = $42,000 + $5,000 - $6,000
Current year's income tax expense=$41,000
Therefore Current year's income tax expense is $41,000
