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Question 1: Freeman, Inc., reported net income of $40,000 for 2005. However, the company's income tax return excluded a revenue item of $3,000 (reported on the income statement) because under the tax laws the $3,000 would not be reported for tax purposes until 2006. Assuming a 30% income tax rate, this situation would cause a 2005 deferred tax amount of
Option 1: Top of Form
Option 2: $3,000 asset.
Option 3: $3,000 liability
Option 4: $ 900 asset.
Option 5: $ 900 liability.
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