In its 2014 income statement, Tow Inc., reported proceeds from an officer€™s life insurance policy of $90,000 and depreciation of $250,000. Tow was the owner and beneficiary of the life insurance on its officer. Tow deducted depreciation of $370,000 in its 2014 income tax return when the tax rate was 30%. Data related to the reversal of the excess tax deduction for depreciation follow:

Tow has no other temporary differences.

Required:
In its December 31, 2014, balance sheet, what amount should Tow report as a deferred taxliability?

Transcribed Image Text:

Reversal of Excess Tax Deduction for Depreciation Enacted Tax Rates Year 2015 2016 2017 2018 $50,000 40.000 20,000 10,000 35% 35 25 25