Geisler Corp.provided you with the following information for the year ending December 31, 2017: Net Income before taxes: $150,000 Depreciation (included in above)$90,000 CCA$250,000
The net book value of the capital assets was $1,100,000, and their UCC was $900,000 on January 1, 2017.
A temporary difference of $200,000 is reflected in an accumulated deferred income tax liability (DTL)balance of $90,000 at January 1, 2017.
There were no permanent differences.
Taxable income in the three-year carry back period was $400,000.Tax losses are carried back as far as allowable by law.
A tax rate of 45% applies to the current and previous years.
As a result of the company's temporary differences, Geisler's 2017 statement of financial position would show:

Question

Quizplus · Accepted Answer

The correct answer is a Deferred tax liability of $162,000. This is calculated by taking the difference between the net book value of the capital assets and their UCC ($1,100,000 - $900,000 = $200,000), and applying the tax rate of 45% to this difference ($200,000 * 45% = $90,000). The existing deferred tax liability of $90,000 at the beginning of the year adds to this, resulting in a new deferred tax liability of $162,000.