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Problem 13-1 Calculating deferred tax amounts (LO 13-2, LO 13-4) Moss Inc. follows GAAP for...

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Accounting

Problem 13-1 Calculating deferred tax amounts (LO 13-2, LO 13-4)

Moss Inc. follows GAAP for financial reporting purposes and appropriately uses the installment method of accounting for income tax purposes. It reported $250,000 of pre-tax income under GAAP, but it will report the corresponding taxable income in the following years. The enacted tax rate is 35%.

Taxable Income
2016 $ 25,000
2017 50,000
2018 75,000
2019 100,000

The installment income is the firms only temporary difference.

Required:

What amount should be included as the deferred tax liability in Mosss December 31, 2016, balance sheet?

Deferred tax liability

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