Reference no: EM131977945

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