?

Zeff Co. prepared the following reconciliation of its pretax financial
statement income to taxable income for the year ended December
31, year 1, its first year of operations:

Pretax financial income $160,000

Nontaxable interest received on municipal securities (5,000)

Long-term loss accrual in excess of deductible amount 10,000

Depreciation in excess of financial statement amount (25,000)

Taxable income $140,000

Zeff’s tax rate for year 1 is 40%.
In its December 31, year 1 balance sheet, what should Zeff
report as deferred income tax liability?