Question: Moss Inc. uses the accrual method of accounting for financial reporting purposes and appropriately uses the installment method of accounting for income tax purposes. It

Moss Inc. uses the accrual method of accounting for financial reporting purposes and appropriately uses the installment method of accounting for income tax purposes. It will collect $250,000 of installment income in the following years when the enacted tax rates are as indicated.

The installment income is the firm€™s only temporary difference.

Required:
What amount should be included as the deferred tax liability in Moss€™s December 31, 2013, balancesheet?

Collection of Income Enacted Tax Rates 2013 2014 2015 2016 S 25,000 50,000 75,000 100,000 35% 30 30 25

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