(Explain Computation of Deferred Tax Liability for Multiple Tax Rates) At December 31, 2007, Hingis Corporation has one temporary difference which will reverse and cause taxable amounts in 2008.

In 2007 a new tax act set taxes equal to 45% for 2007, 40% for 2008, and 34% for 2009 and years thereafter.

Instructions Explain what circumstances would call for Hingis to compute its deferred tax liability at the end of 2007 by multiplying the cumulative temporary difference by:

(a) 45%.

(b) 40%.

(c) 34%.