Difference in asset basis problem

Reference no: EM13145617

Analysis of the assets and liabilities of Marie Corp. on December 31, 2011, 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:

2012 ............................ $80,000
2013 ............................ 70,000
2014 ............................ 72,000
2015 ............................ 40,000
2016 ............................ 38,000

The enacted tax rates are 30 percent for the years 2011-2014 and 35 percent for 2015-2018. The total deferred tax liability on December 31, 2011, should be

A) $105,000.

B) $93,900.

C) $90,000.

D) $69,000.

Reference no: EM13145617

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