Answer:
Unfavorable (increases taxable income).
Explanation:
$200,000-$50,000=$150,000Unfavorable (increases taxable income)
Book income would be $150,000 less than taxable income because the company increased its reserve for warranties by $200,000 and then went ahead to deduct $50,000 on its tax return related to warranty payments made during the year which is why the impact on taxable income compared to pretax book income of the book-tax difference that results from these two events will be $150,000 Unfavorable (increases taxable income).
