Clipp, Inc., earns book net income before tax of $600,000.Clipp puts into service a depreciable asset this year, and first year tax depreciation exceeds book depreciation by $120,000.Clipp has recorded no other temporary or permanent book-tax differences.Assuming that the U.S.tax rate is 21%, what is Clipp's deferred income tax liability reported on its GAAP financial statements?

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The deferred tax liability is calculated as the difference in depreciation ($120,000) multiplied by the tax rate (21%), which equals $25,200.