Moy Company at the end of 20x1, its first year of operations, prepared a reconciliation between

pretax financial income and taxable income as follows:

Pretax financial income $ 3,000,000

Advanced rentals 500,000

Installment sales (200,000)

Taxable income $ 3,300,000

The gross profit from the installment sales will be realized next year. The advanced rentals of

$500,000 will reverse equally over the next 2 years. The income tax rate is 30% for all years.

a.The deferred tax liability to be recognized is

a. $15,000.

b. $30,000.

c. $60,000.

d. $90,000.

b.The deferred tax asset-- current to be recognized is

a. $0

b. $75,000

c. $60,000

d. $100,000