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Parson's pretax accounting income in Year 2 is $100,000. Parson deducts depreciation for tax purposes in excess of accounting depreciation of $5,000 in Year
Parson's pretax accounting income in Year 2 is $100,000. Parson deducts depreciation for tax purposes in excess of accounting depreciation of $5,000 in Year 1 and $10,000 in Year 2. It is expected the depreciation deduction will reverse $7,000 in Year 3 and $8,000 in Year 4. The income tax rate is 40%. What is the amount in the deferred tax liability account at the end of Year 2?
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