1. On January 1, 2016, Bedrock Company began recognizing revenues from all sales under the accrual method for financial reporting purposes and under the installment sales method for income tax purposes. Bedrock reported the following gross margin on sales for 2016 and2017:
   

   	Accrual	Installment
   Year	Method	Sales Method
   2016	$1,200,000	$1,000,000
   2017	1,800,000	1,400,000

   
   The enacted tax rate for both 2016 and 2017 was 30%. Assuming there are no other temporary differences, 2017 what is the amount of deferred tax liability that Bedrock should report on its December 31, 2017 balance sheet?

   $120,000

   $450,000

   $60,000

   $180,000

Answer rating: 100% (QA)

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