Tax asset and deferred tax liability

Reference no: EM13125195

Nocera, Inc., earns book net income before tax of $600,000 in 2010. Nocera acquires a depreciable asset in 2010 and first year tax depreciation exceeds book depreciation by $120,000. Nocera has no other temporary or permanent differences. Assuming the U.S. tax rate is 35%, and that this is Nocera's first year of operations, what is Nocera's balance in its deferred tax asset and deferred tax liability accounts at year end?

a. $0 and $42,000.

b. $42,000 and $0.

c. $42,000 and $42,000.

d. $0 and $0.

e. None of the above.

Reference no: EM13125195

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