Deferred Income Taxes and Changing Tax Rates The Waterloo Company uses straight-line depreciation accounting in its corporate financial reports but MACRS depreciation accounting for income tax purposes. At the end of the year, Waterloo reported taxable income to the IRS totaling $130,000 and pretax net income to its shareholders of $180,000. MACRS depreciation expense for the year totaled $80,000, while straightline depreciation was only $30,000. Assume an effective tax rate of 35%; calculate Waterloo's deferred income taxes for the year. $ Is the company's deferred income tax effect an asset or a liability? If the income tax rate was lowered to 30%, how much will the company's deferred income taxes change? Compute Waterloo's deferred income taxes using a 30% tax rate. $ Complete the following statement: Waterloo's deferred income tax by $ using a 30% tax rate. Check G