t December 31, 2016, Pearl Company had a net deferred tax liability of $393,600. An explanation of the items that compose this balance is as follows Resulting Balances in Deferred Taxes Temporary Differences Excess of tax depreciation over book depreciation $216,800 2. from pending Accrual, for book purposcs, of estimated loss contingency f lawsuit that is expected to be settled in 2017. The loss will be deducted on the tax return when paid. (53,400) Accrual method used for book purposes and installment method used for tax purposes for an isolated installment sale of an investment. 3. 230,200 $393,600 In analyzing the temporary differences, you find that $27,400 of the depreciation temporary difference ill reverse in 2017, and $129,300 of the temporary difference due to the installment sale will reverse in 2017. The tax rate for all years 40% Indicate the manner in which deferred taxes should be presented on Pearl Company's December 31, 2016, balance sheet. Pearl Company's Balance Sheet 31, 2016 Deferred Tax Liability 393280