Question 7 (2 points)
Rowen, Inc. had pre-tax accounting income of $2,700,000 and a tax rate of 20% in
2025, its first year of operations. In 2025, the company had the following
transactions:
Received rent from Jane, Co. for 2026 $ 96,000
Municipal bond income 120,000
Depreciation for tax purposes in excess of book depreciation 60,000
Installment sales profit to be taxed in 2026 162,000
Which of the following deferred tax accounts and balances would Rowen report at
December 31, 2025?
Deferred Tax Asset $31,200
Deferred Tax Asset $19,200
Deferred Tax Liability $31,200
Deferred Tax Liability $19,200
