On Its Tax Return at the End of the Current

Multiple Choice

On its tax return at the end of the current year Webnet Inc. has $6 million of tax depreciation in excess of depreciation in its income statement. A disclosure note reveals that $1 million of the $6 million difference will reverse itself next year, and the remainder will reverse over the next 4 years. In the absence of other temporary differences, in the balance sheet at the end of the current year Webnet would report:

A) Both a current deferred tax asset and a noncurrent deferred tax asset.
B) A noncurrent deferred tax asset.
C) Both a current deferred tax liability and a noncurrent deferred tax liability.
D) A noncurrent deferred tax liability.