Deferred Tax Example Balance Sheet Classification of DTAs/DTLs At the end of 2024, Bonny Company had a $50,000 Balance in its DTA and a $425,000 balance in its DTL. The tax rate for all years is 35%. An explanation of the items that composed these balances is as follows: What if?

			What if?
Temporary Differences	Cumulative Temporary Differences	DTA or DTL?	DTA or DTL?
(causing DTAs or DTLs)		(Amount)	(Amount)
Excess tax depreciation over book. $45,000 of the temporary difference will reverse next year.	$500,000
Litigation expense accrual on books, not allowed for tax purposes until paid. The lawsuit is expected to be settled and paid next year.	$125,000
An investment was sold this year. We have a receivable from the buyer that will be paid over the next several years. The full sale is recognized now on books, but the installment method for tax. $180,000 of the temporary difference will be reversed next year.	$562,500
Totals	DTL
	DTA

The tax rate for 2024 is 35%, and 30% beyond. How does this change the DTA & DTL Balances?