Temporary Difference

At the end of 2013, its first year of operations, Slater Company reported a book value for its depreciable assets of $40,000 for financial reporting purposes and $33,000 for income tax purposes. Slater earned taxable income of $97,000 during 2013. The company is subject to a 30% income tax rate, and no change has been enacted for future years. The depreciation was the only temporary difference between taxable income and pretax financial income.

Income Tax Expense   xxxxxx (debit)

Income Tax Payable xxxxx (credit)

Deferred Tax Liability xxxxx (credit)