Question: Kensington Valley Corporation claimed a tax deduction of $10,000 which was uncertain when it was deducted in the current year. However, they are relatively certain of receiving the deduction over a five-year period. Their book income for the current year is $120,000 and they have a tax rate of 35%. Which of the following is true? Multiple choice question. Kensington's pre-tax income is equal to $120,000 Under GAAP, Kensington subtracts the entire $10,000 in the current year The current portion of Kensington's income tax expense is $38,500 Kensington has a deferred tax asset of $2,800.