In its year 3 income statement, Noll reported depreciation of $400,000. Noll reported depreciation of 550,000 in year 3 tax return. The difference In deprecation is only temp and it will reverse equally over the next 2 years. Assume that income tax rates are 35% for year 3, 30% year 4, 25% year 5 and 6/ What amount should be included in deferred income tax liability in year 3?

The awnser is 40,000...how did they get this?