Shear, Inc. began operations in year 1. Included in Shear's year 1 financial statements were bad debt expenses of $1,400 and profit from an installment sale of $2,600.
For tax purposes, the bad debts will be deducted and the profit from the installment sale will be recognized in year 2.
The enacted tax rates are 30% in year 1 and 25% in year 2. In its year 1 income statement, what amount should Shear report as deferred income tax expense?