Brief Exercise 16-2 (Algo) Temporary difference; determine taxable income; determine deferred tax amount (L016-2] Kara Fashions uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. Three years after its purchase, one of Kara's buildings has a book value of $960,000 and a tax basis of $720,000. There were no other temporary differences and no permanent differences. Taxable income was $5 million and Kara's tax rate is 25%. What is the deferred tax liability to be reported in the balance sheet? Assuming that the deferred tax liability balance was $34,000 the previous year, prepare the appropriate journal entry to record income taxes this year. Complete this question by entering your answers in the tabs below. Balance Sheet General Journal What is the deferred tax liability to be reported in the balance sheet? (Enter your answer in whole dollars.) Deferred tax liability Balance Sheet General Journal > Assuming that the deferred tax liability balance was $34,000 the previous year, prepare the appropriate journal entry to record income taxes this year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) View transaction list Journal entry worksheet 1 Record income tax expense. Note: Enter debits before credits. Transaction General Journal Debit Credit 1