Chapter 19, Problem 4BE

To determine

Deferred tax liability: Some business activities may create a dissimilarity between the amount recorded in the books and the taxable income. These differences create deferred tax liability. For example, Mr. J is a car dealer who sold a car on installment. The actual sale happened in the current year but the benefits are receivable in the future years. This creates a difference in the books of accounts and the taxable account.

To determine the income tax expense for the year 2018.