Sicora Inc. reported installment sales totaling $670,000 in its income statement for Year 1, its first year of operations. Sicora is not required to report installment sales income on its tax return until the cash is collected. Sicora will make the collections on these installment sales as follows: Year 1$70,000 Year 2 130,000 Year 3 140,000 Year 4 160,000 Year 5 170,000 Total$670,000 The enacted tax rate is 30% in each of these years. What is the ending balance in the deferred tax liability account related to these installment sales at the end of Year 1? deferred tax liability:

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Sicora Inc. reported installment sales totaling $670,000 in its income statement for Year 1, its first year of operations. Sicora is not required to report installment sales income on its tax return until the cash is collected. Sicora will make the collections on these installment sales as follows:


Year 1	$	70,000
Year 2		130,000
Year 3		140,000
Year 4		160,000
Year 5		170,000
Total	$	670,000

The enacted tax rate is 30% in each of these years. What is the ending balance in the deferred tax liability account related to these installment sales at the end of Year 1?

deferred tax liability:

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