Recording the deferred tax liability


Response to the following problem:

Clydesdale Corporation has a cumulative temporary difference related to depreciation of $580,000 at December 31, 2014. This difference will reverse as follows: 2015, $42,000; 2016, $244,000; and 2017, $294,000. Enacted tax rates are 34% for 2015 and 2016, and 40% for 2017.

Compute the amount Clydesdale should report as a deferred tax liability at December 31, 2014.

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Taxation: Recording the deferred tax liability
Reference No:- TGS02123108

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