What should be the balance in Kent's deferred tax liability account as of December 31, 2009?

Question

Quizplus · Accepted Answer

To calculate the balance in Kent's deferred tax liability account, we need to multiply the temporary difference by the applicable tax rate. The temporary difference is $25,000 ($75,000 book value minus $50,000 tax basis), and the applicable tax rate is 30%. Therefore, the balance in Kent's deferred tax liability account would be $7,500 ($25,000 x 30%).

What Should Be the Balance in Kent's Deferred Tax Liability