What is deferred tax liability to reported in balance sheet

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Problem

Kara Fashions uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. Three years after its purchase, one of Kara's buildings has a book value of $400,000 and a tax basis of $300,000. There were no other temporary differences and no permanent differences. Get the instant assignment help. Taxable income was $4 million and Kara's tax rate is 25%. What is the deferred tax liability to be reported in the balance sheet?

Reference no: EM133901458

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