A Company's Income Statement Reported Net Income of $40,000 During

Multiple Choice

A company's income statement reported net income of $40,000 during 2019.The income tax return excluded a revenue item of $3,000 (reported on the income statement) because under the tax laws the $3,000 would not be reported for tax purposes until 2020.Which of the following statements is correct assuming a 21% tax rate?

A) A $3,000 deferred tax liability is reported as of December 31,2019.
B) A $3,000 deferred tax asset is reported as of December 31,2019.
C) A $630 deferred tax liability is reported as of December 31,2019.
D) A $630 deferred tax asset is reported as of December 31,2019.