Kara Fashions uses straight-line depreciation for financial statement reporting and MARS for Income tax reporting. Three years after Its purchase, one of Kara's buildings has a book value of $720,000 and a tax basis of $540,000. There were no other temporary differences and no
permanent differences. Taxable Income was $6 milllon and Kara's tax rate Is 25%.
What is the deferred tax llablity to be repoed in the balance sheet? Assuming that the deferred tax liability balance was $28,000 the previous year, prepare the appropriate journal
entry to record Income taxes this year.