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Assume that Maddox Corporation buys new equipment for $ 1 5 , 0 0 0 on January 1 , 2 0 2 1 . Depreciation

Assume that Maddox Corporation buys new equipment for $15,000 on January 1,2021. Depreciation for book purposes using the SL method is $3,000 and $5,000 for tax purposes using the SYD method. Assume that depreciation is the only book-versus-tax difference. Income before depreciation and taxes is $30,000 each year over the next five years and the statutory tax rate is 40%. How much will the company report as a deferred tax liability for 2021?

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