B is corrent. A common mistake when solving this problem would be to treat the depletion difference between book and tax income as a temporary difference, similar to using the MACRS for tax and the straight-line method for book purposes. But using percentage depletion for tax, which means taking depletion in excess of cost, creates a permanent difference which does not affect the deferred income tax provision. Therefore, the correct answer would be $0.
A is incorrect. A common mistake when solving this problem would be to treat the depletion difference between book and tax income as a temporary difference, similar to using the MACRS for tax and the straight-line method for book purposes. But using percentage depletion for tax, which means taking depletion in excess of cost, creates a permanent difference which does not affect the deferred income tax provision. Therefore, the correct answer would be $0.
A is incorrect. A common mistake when solving this problem would be to treat the depletion difference between book and tax income as a temporary difference, similar to using the MACRS for tax and the straight-line method for book purposes. But using percentage depletion for tax, which means taking depletion in excess of cost, creates a permanent difference which does not affect the deferred income tax provision. Therefore, the correct answer would be $0.
D is incorrect. A common mistake when solving this problem would be to treat the depletion difference between book and tax income as a temporary difference, similar to using the MACRS for tax and the straight-line method for book purposes. But using percentage depletion for tax, which means taking depletion in excess of cost, creates a permanent difference which does not affect the deferred income tax provision. Therefore, the correct answer would be $0.
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