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In its Year 3 income statement, Orr corp. reported depreciation of $400,000. Orr reported depreciation...

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Accounting

In its Year 3 income statement, Orr corp. reported depreciation of $400,000. Orr reported depreciation of $550,000 onits Year 3 income tax return. The difference in depreciation is the only temporary difference, and it will reverse equally over the next 3 years. Assume that the enacted income tax rates are 35% for Year 3, 30% for Year 4, and 25% for Year 5 and Year 6. What amount should be included in the deferred income tax liability in Orrs December 31, Year 3, balance sheet? $37,500 $40,000 $45,000 52,500

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