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Business, 01.04.2020 22:36 robert7248

Early this year, ZeZe Inc. paid a $52,000 legal fee in connection with a disputeover ZeZe’s title to investment land. ZeZe’s auditors required the corporation toexpense the payment on this year’s financial statements. According to ZeZe’s taxadviser, the payment is a nondeductible capital expenditure. ZeZe’s tax rate is 35 per cent.

a. Compute the deferred tax asset or a deferred tax liability (identify which)resulting from this difference in accounting treatment.

b. When will the temporary difference reverse?

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