Computing and Reporting Deferred Income Taxes

Fisk, Inc., purchased $600,000 of construction equipment on January 1, 2014. The equipment is being depreciated on a straight-line basis over six years with no expected salvage value. MACRS depreciation is being used on the firm's tax returns. At December 31, 2016, the equipment's book value is $250,000 and its tax basis is $144,000 (this is Fisk's only temporary difference). Over the next three years, straight-line depreciation will exceed MACRS depreciation by $25,800 in 2017, $25,800 in 2018, and $54,400 in 2019. Assume that the income tax rate in effect for all years is 40%.

a. What amount of deferred tax liability should appear in Fisk's December 31, 2016, balance sheet? $Answer b. What amount of deferred tax liability should appear in Fisk's December 31, 2017, balance sheet? $Answer c. What amount of deferred tax liability should appear in Fisk's December 31, 2018, balance sheet? $Answer d. Where should the deferred tax liability accounts be classified in Fisks 2016, 2017, and 2018 year-end balance sheets?

Year	Long-Term Portion	Current Portion
2016	$Answer	$Answer
2017	$Answer	$Answer
2018	$Answer	$Answer