Which one of the following is a permanent difference between book and taxable income?

• Interest received on municipal bonds

• Installment sales

• Bad debts expense

• Warranty expense

Stone Company reported pre-tax book income of $700,000 in 20X1, the first year of operation. The tax depreciation exceeded the book depreciation by $90,000. The tax rate for 20X1 and all future years was 21%.

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

• $3,500

• $6,300

• $14,000

• $18,900