Difference in asset basis arose from temporary differences

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Reference no: EM13145561

Analysis of the assets and liabilities of Marie Corp. on December 31, 2002, disclosed assets with a tax basis of $1,000,000 and a book basis of $1,300,000. There was no difference in the liability basis. The difference in asset basis arose from temporary differences that would reverse in the following years:

2003 $80,000
2004 70,000
2005 72,000
2006 40,000
2007 38,000

The enacted tax rates are 30 percent for the years 2002-2005 and 35 percent for 2006-2009. The total deferred tax liability on December 31, 2002, should be

a.$105,000.

b.$93,900.

c.$90,000.

d.$69,000.

Reference no: EM13145561

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