11)

For its first year of operations, Oakwood Corporation had pretax accounting income of $490,000 and taxable income of $410,000. The book-tax difference was due to depreciation expense that was $80,000 higher on the tax return than on the books. Oakwoods tax rate is 20% for the current and future years. What should Oakwood report as its deferred tax asset (DTA) or deferred tax liability (DTL) as of the end of its first year of operations?

Choose the right answer below?

1. $98,000 DTA
2. $16,000 DTA
3. $82,000 DTL
4. $16,000 DTL