Ignoring operating expenses,what deferred tax liability would Isaac report in its year-end 2016 balance sheet?

Question

Quizplus · Accepted Answer

The deferred tax liability is calculated as the difference between the book basis and tax basis of the assets or liabilities that will reverse in the future. According to the information given in the question, the applicable tax rate is 35%. From the balance sheet, the book value of the assets in question is $450 million and their tax value is $270 million. The difference between the two values is $180 million ($450 million - $270 million), and the deferred tax liability would be 35% of this amount, which equals $63 million. However, the question asks to ignore operating expenses, so the deferred tax liability only includes the difference in book and tax basis of the assets in question. Therefore, the answer is $162 million ($63 million + $99 million).

Ignoring Operating Expenses,what Deferred Tax Liability Would Isaac Report in Its