On January 1, 2017, Kunkel Corporation purchased an asset for $32,000. Assume that this is the only

Question:

On January 1, 2017, Kunkel Corporation purchased an asset for $32,000. Assume that this is the only asset owned by the corporation. Kunkel has decided to use the straight-line method to depreciate it. For tax purposes, it will be depreciated over three years. It will be depreciated over five years, however, for the financial statements provided to stockholders. Assume that Kunkel Corporation is subject to a 40% tax rate.

Required

Calculate the balance to be reflected in the Deferred Tax account for Kunkel Corporation for each year 2017 through 2021.

Financial Statements
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