Problem:
Terminator Corporation has a cumulative temporary difference of $630,000 at December 31,2007. This difference will reserve as follows: 2008, $42,000; 2009, $294,000; and 2010, $294,000. Enacted tax rates are 34%, for 2008 and 2009, and 40 % for 2010. Compute the amount Terminator should report as a deferred tax liability at December 312007.