At December 31, 2012, Cascade Company had a net deferred tax liability of $500,960. An explanation of the items that compose this balance is as follow.
Temporay Differences Balance in Deferred taxes
1. Excess of tax depreciation over book depreciation $232,100
2. Accrual, for book purposes, of estimated loss contingency
from pending lawsuit that is expected to be settled in 2013. The
loss will be deducted on the tax return when paid. (65,880)
3. Accrual method used for book purposes and installment method used for tax purposes for an isolated installment sale
of an investment. 334,740
Net deferred tax liability = $500,960
In analyzin the temporary differences, you find that $33,190 of the depreciation difference will reverse in 2013, and $115,250 of the temporary difference due to the installment sale will reverse in 2013. the tax rate for all years is 40%
Indicate the manner in which deferred taxes should be presented on Cascade Company's December 31, 2012, balance sheet.