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Question - Ross Co. began operations in the current year. Use the following facts to answer this question.
Ross reported $225,000 in income before income taxes for the year.
Ross' current-year tax depreciation exceeded its book depreciation by $25,000.
Ross had nondeductible book expenses of $10,000 related to permanent differences.
Ross' tax rate for the current year is 40%.
Ross' tax rate for subsequent years is 35%.
In its current-year balance sheet, what amount of deferred income tax liability should Ross report?
$8,750
$10,000
$12,250
$14,000
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