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  3. rainbow co. began operations in 2018 and reported

Rainbow Co. began operations in 2018 and reported $300,000 in income before income taxes for...

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Rainbow Co. began operations in 2018 and reported $300,000 in income before income taxes for the year. Rainbows 2018 tax depreciation exceeded its book depreciation by $100,000. Rainbow also had nondeductible book expenses of $40,000 related to permanent differences. Rainbows tax rate for 2018 was 25%, and the enacted rate for years after 2018 is 30%. In its December 31, 2018, balance sheet, what amount of deferred income tax liability should Rainbow report? O $42,000 O $30,000 O $25,000. O $18,000

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