Noble IncPaid $310,000 for Equipment Three Years Ago

Noble Inc.paid $310,000 for equipment three years ago.This year,it sold the equipment for $200,000.Through date of sale,accumulated book depreciation was $93,840 and accumulated tax depreciation was $147,327.Assuming a 35% tax rate,what is the effect of the sale on Noble's deferred tax accounts?

A) $18,720 increase in deferred tax assets
B) $18,720 increase in deferred tax liabilities
C) $18,720 decrease in deferred tax liabilities
D) No effect on deferred tax accounts

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free