Tax liability reported on gentry balance sheet


A reconciliation of Gentry Company's pretax accounting income with its taxable income for 2012, its first year of operations, is as follows:

Pretax accounting income $3,000,000
Excess tax depreciation (180,000)
Taxable income $2,820,000

The excess tax depreciation will result in equal net taxable amounts in each of the next three years. Enacted tax rates are 40% in 2012, 35% in 2013 and 2014, and 30% in 2015. The total deferred tax liability to be reported on Gentry's balance sheet at December 31, 2012, is

a. $72,000.

b. $60,000.

c. $63,000.

d. $54,000.

Request for Solution File

Ask an Expert for Answer!!
Accounting Basics: Tax liability reported on gentry balance sheet
Reference No:- TGS046626

Expected delivery within 24 Hours