Problem - Cullumber Company reported the following results for the year ended December 31, 2018, its first year of operations:
2018
Income (per books before income taxes) $1461000
Taxable income 2650000
The disparity between book income and taxable income is attributable to a temporary difference which will reverse in 2019. What should Cullumber record as a net deferred tax asset or liability for the year ended December 31, 2018, assuming that the enacted tax rates in effect are 35% in 2018 and 30% in 2019?
$356700 deferred tax liability
$416150 deferred tax asset
$416150 deferred tax liability
$356700 deferred tax asset