Stadler Corporation pays federal income tax at a 34 percent rate. Stadler Corporation reports $100,000 depreciation expense on its financial statements and deducts $140,000 depreciation expense on its tax return. How will Stadler account for the difference between its federal tax liability and its book tax expense on its financial statements?
a. $13,600 deferred tax liability
b. $13,600 deferred tax asset
c. $40,000 deferred tax liability
d. $40,000 deferred tax asset
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