A reconciliation of Quebec Corp.'s pre-tax accounting income with its taxable income for 2020, its first year of operations, is as follows: $\begin{array}{lr}
\text { Pre-tax account ing income } & \$ 3,000,000 \
\text { Excess CCA } & (90,000) \
\text { Taxable income } & \$ 2,910,000
\end{array}$ The excess CCA will result in equal net taxable amounts in each of the next three years. Enacted tax rates are 40% in 2020, 35% in 2021, and 30% in both 2022 and 2023. The total deferred tax liability to be reported on Quebec's SFP at December 31, 2020 is

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The excess CCA of $90,000 will reverse equally over the next three years, meaning $30,000 per year. The tax rates for these years are 35% for 2021 and 30% for 2022 and 2023. The deferred tax liability for each year is calculated as the reversal amount ($30,000) multiplied by the tax rate for that year: $30,000 * 35% = $10,500 for 2021, and $30,000 * 30% = $9,000 for 2022 and 2023. The total deferred tax liability is the sum of these amounts: $10,500 + $9,000 + $9,000 = $28,500.

A Reconciliation of Quebec Corp The Excess CCA Will Result in Equal Net Taxable Amounts