Smith Company reported $350,000 in book income before income tax during 20X1, its first year of operation. The tax depreciation exceeded its book depreciation by $30,000. The tax rate for 20X1 and all future years was 21%.

What amount of deferred tax liability should Smith report in its December 31, 20X1, balance sheet?

Multiple Choice

• $9,000

• $10,000

• $6,300

• $30,000