Giada Foods reported $940 million in income before income taxes for 2009, its first year of operations.

Question:

Giada Foods reported $940 million in income before income taxes for 2009, its first year of operations. Tax depreciation exceeded depreciation for financial reporting purposes by $100 million.

The income tax rate for 2009 was 35%, but the enacted rate for years after 2009 is 40%.

The balance in the deferred tax liability in the December 31, 2009, balance sheet is:

A. $16 million

B. $35 million

C. $40 million

D. $56million

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...