Calculating and Reporting Deferred Income Taxes Bens' Corporation paid $18,000 on December 31 of Year 1 for equipment with a six-year useful life. The equipment will be depreciated in the amount of $3,000 each year. Bens' took the entire $18,000 as an expense in its tax return in Year 1 . Assume this is the only timing difference between the firm's books and its tax return. Bens' tax rate is 35%. Required a. What amount of deferred tax liability should appear in Bens' December 31 of Year 1 balance sheet? b. Where in the balance sheet should the deferred tax liability appear? Deferred tax liabilities are recorded as noncurrent liabilities on the balance sheet. ODeferred tax liabilities are recorded as current liabilities on the balance sheet. ODeferred tax liabilities are recorded as current and/or noncurrent liabilities on the balance sheet, depending on when they are due. ODeferred tax liabilities are not reported on the balance sheet, rather they are disclosed in the Notes to the Financial Statements. c. What amount of deferred tax liability should appear in Bens' December of Year 2 balance sheet? Deferred tax liability $1,950