Isaac Inc. began operations in January 2013. For certain of its
property sales, Isaac recognizes income in the period of sale for
financial reporting purposes. However, for income tax purposes, Isaac
recognizes income when it collects cash from the buyer’s installment
In 2013, Isaac had $600 million in sales of this type. Scheduled collections for these sales are as follows:
Assume that Isaac has a 30% income tax rate and that there were no
other differences in income for financial statement and tax purposes.
Ignoring operating expenses, what deferred tax liability would Isaac report in its year-end 2013 balance sheet?