Lyons Company deducts insurance expense of $126,000 for tax purposes in 2014, but

D. $50,400

Explanation:

The computation of the deferred tax liability is shown below:

= Insurance expense for taxation purpose × rate of tax

= $126,000 × 0.40

= $50,400

Hence, the deferred tax liability is $50,400

Therefore the correct option is C.

Hence, the same is to be considered by applying the above formula in order to determine the accurate amount

Explanation:

M2-28. Computing and Comparing Income and Cash Flow MeasuresPenno Corporation recorded service revenues of $200,000 in 2020, of which $170,000 were on credit and $30,000 were for cash. Moreover, of the $170,000 credit sales for 2020, Penno collected $20,000 cash on those receivables before year‑end 2020. The company also paid $25,000 cash for 2020 wages. Its employees also earned another $15,000 in wages for 2020, which were not yet paid at year‑end 2020. (a) Compute the company’s net income for 2020; and (b) how much net cash inflow or outflow did the company generate in 2020? Explain why Penno’s net income and net cash flow differ.