Deferred tax asset or deferred tax liability, and calculate

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Reference no: EM13868893

Frankfort Company identifies depreciation as the only difference for future taxable amounts. In Year 1, its depreciation for financial reporting purposes is $3,500 and $5,000 for income tax reporting purposes. Frankfort Company has an income tax rate of 35%. Explain whether this is a deferred tax asset or deferred tax liability, and calculate the amount. 

Reference no: EM13868893

Deductible until paid for income tax purposes.

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The income tax rate for the current year

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The company reported pretax operating income

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