Question: Oxford Corporation began operations in 2010 and reported pretax financial income of $225,000 for the year. Oxfords tax depreciation exceeded its book depreciation by $40,000.

Oxford Corporation began operations in 2010 and reported pretax financial income of $225,000 for the year. Oxford’s tax depreciation exceeded its book depreciation by $40,000. Oxford’s tax rate for 2010 and years thereafter is 30%. In its December 31, 2010 balance sheet, what amount of deferred tax liability should be reported?

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