At the End of 2017, Its First Year of Operations

question 42

Multiple Choice

At the end of 2017, its first year of operations, Ontario Corp. prepared the following reconciliation between pre-tax accounting income and taxable income: The estimated lawsuit expense of $750,000 will be deductible in 2019 when it is expected to be paid. The instalment sales will be realized at $300,000 in each of the next two years. The income tax rate is 30% for all years. The deferred tax liability to be recorded is

• A)$180,000.
• B)$ 90,000.
• C)$ 67,500.
• D)$ 45,000.