At the end of 2021, its first year of operations, Alsup Consulting's reconciliation of pretax accounting income to taxable income was as follows:             Pretax accounting income $ 250,000     Permanent difference   (14,700 )       235,300     Temporary difference-depreciation   (19,800 )   Taxable income $ 215,500         Alsup's tax rate is 25%. No estimated taxes have been paid.   What should Alsup report as its deferred income tax liability as of the end of 2021?

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Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.