Question: Parker Company identifies depreciation as the only difference for future taxable amounts. In Year 1, its depreciation for financial reporting purposes is $ 9,000 and

Parker Company identifies depreciation as the only difference for future taxable amounts. In Year 1, its depreciation for financial reporting purposes is $ 9,000 and $ 10,500 for income tax reporting purposes. Parker has an income tax rate of 35%. Explain whether this is a deferred tax asset or deferred tax liability, and calculate the amount.

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