Your answer is partially correct. Try again. At December 31, 2016, Sweet 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 $216,800 1. Fxces Temporary Differences Excess of tax depreciation over book depreciation Accrual, for book purposes, of estimated loss contingency from pending lawsuit that is expected to be settled in 2017. The loss will be deducted on the tax return when paid. Accrual method used for book purposes and installment method used for tax purposes for an isolated installment sale of an investment. (53,400) 3. 230,200 $393,600 In analyzing the temporary differences, you find that $27,400 of the depreciation temporary difference will 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 is 40%. Indicate the manner in which deferred taxes should be presented on Sweet Company's December 31, 2016, balance sheet. Sweet Company's Balance Sheet December 31, 2016 Non-current Liabilities Deferred Tax Liability 384320 Click if you would like to Show Work for this question: Open Show Work Your answer is partially correct. Try again. At December 31, 2016, Sweet 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 $216,800 1. Fxces Temporary Differences Excess of tax depreciation over book depreciation Accrual, for book purposes, of estimated loss contingency from pending lawsuit that is expected to be settled in 2017. The loss will be deducted on the tax return when paid. Accrual method used for book purposes and installment method used for tax purposes for an isolated installment sale of an investment. (53,400) 3. 230,200 $393,600 In analyzing the temporary differences, you find that $27,400 of the depreciation temporary difference will 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 is 40%. Indicate the manner in which deferred taxes should be presented on Sweet Company's December 31, 2016, balance sheet. Sweet Company's Balance Sheet December 31, 2016 Non-current Liabilities Deferred Tax Liability 384320 Click if you would like to Show Work for this question: Open Show Work