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Ayres Services acquired an asset for $82 million in 2018. The asset is depreciated for financial reporting purposes over four years on a straight-line basis
Ayres Services acquired an asset for $82 million in 2018. The asset is depreciated for financial reporting purposes over four years on a straight-line basis (no residual value). For tax purposes the asset's cost is depreciated by MACRS. The and 202tax rate is for pretax acounting income, depreciaton, and toxable incomein 2018, 2019, 2020, are as follows (S in millions) 2018 2019 2020 2021 20.5 20.5 20.5 20.5 (25.5) (33.5) (15.5) (7.5) 335 $ 355 $ 370 405 Pretax accounting income Depreciation on the income statement Depreciation on the tax return Taxable income $ 330 342 375 418 Required: Determine (a) the temporary book-tax difference for the depreciable asset and (b) the balance to be reported in the deferred tax liability account. (Leave no cell blank, enter "O" wherever applicable. Negative amounts should be indicated by a minus sign. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).)
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