The carrying amount of an oil refining facility purchased by Company C in X7 was $250,000 higher than the tax base on the tax return at the end of X7, assuming that this difference was not due to the original recognition and would reverse in the future and that Company C There are no other discrepancies between the accounting book amount and the tax base. The tax rate in ×7 years is 20%, and after ×8 years, the tax rate is changed to 17%. How about this difference should be recognized on the balance sheet in ×7 years?

a. Deferred tax assets $50,000

b.Deferred tax assets $42,500

c. Deferred tax liability $50,000

d.Deferred tax liability $42,500

Answer rating: 100% (QA)

The carrying amount of oil refining facility at the end is the book value of of oil refining facility after charging book depreciation The tax base of ... View the full answer