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Caleb Corporation has three financial statement elements for which the December 31, year 1 book value is different than the December 31, year 1 tax
Caleb Corporation has three financial statement elements for which the December 31, year 1 book value is different than the December 31, year 1 tax basis.
| Book value | Tax basis | Difference | ||||
| Equipment | $200,000 | $120,000 | $80,000 | |||
| Prepaid officers insurance policy | 75,000 | 0 | 75,000 | |||
| Warranty liability | 50,000 | 0 | 50,000 |
As a result of these differences, future taxable amounts are
A.$50,000
B. $80,000
C. $205,000
D. $155,000
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