Nocera,Inc. ,earns book net income before tax of $600,000 in 2010.Nocera acquires a depreciable asset in 2010 and first year tax depreciation exceeds book depreciation by $120,000.Nocera has no other temporary or permanent differences.Assuming the U.S.tax rate is 35%,what is Nocera's deferred income tax liability reported on its financial statements for 2010?

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Quizplus · Accepted Answer

The deferred tax liability is calculated as the temporary difference ($120,000) multiplied by the tax rate (35%), which equals $42,000.