In its 2017 income statement, Tow Inc. reported proceeds from an officer's life insurance policy of $90,000 and depreciation of $250,000. Tow was the owner and beneficiary of the life insurance on its officer. Tow deducted depreciation of $370,000 in its 2017 income tax return. The tax rate is 35%. Data related to the reversal of the excess tax deduction for depreciation follow:
________________________ Reversal of Excess
Year Tax________________ Deduction for Depreciation
2018....................................................$50,000
2019.....................................................40,000
2020.....................................................20,000
2021.....................................................10,000
Tow has no other temporary differences and it had no deferred tax assets or liabilities at
December 31, 2016.
Required:
In its December 31, 2017, balance sheet, what amount should Tow report as a deferred tax liability?