At the beginning of 2012, Barbara, Inc. has a deferred tax asset of $8,000 and deferred tax liability of $6,500. In 2012, pretax financial income was $600,000 and the tax rate was 35%.
Pretax income included:
Interest income from municipal bonds $25,000
Accrued warranty costs, estimated to be used in 2013 $74,000
Prepaid rent expense, will be used in 2013 $16,000
Installment sales revenue, to be collected in 2013 $45,000
Operating loss carryforward $36,000
Deferred tax liability ending balance December 31, 2012 is:
a) $14,850.
b) $15,750.
c) $21,350.
d) $41,650.