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Bens' Corporation paid $12,000 on December 31, 2019, for equipment with a three-year useful life. The equipment will be depreciated in the amount of $4,000
Bens' Corporation paid $12,000 on December 31, 2019, for equipment with a three-year useful life. The equipment will be depreciated in the amount of $4,000 each year. Bens' took the entire $12,000 as an expense in its tax return in 2019. Assume this is the only timing difference between the firm's books and its tax return. Bens' tax rate is 25%.
Required a. What amount of deferred tax liability should appear in Bens' 12/31/2019 balance sheet?
b. What amount of deferred tax liability should appear in Bens' 12/31/2020 balance sheet?
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