Question
Book Hint Print Terences Ayres Services acquired an asset for $112 million in 2024. The asset is depreciated for financial reporting purposes over four years
Book Hint Print Terences Ayres Services acquired an asset for $112 million in 2024. 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 enacted tax rate is 25%. Amounts for pretax accounting income, depreciation, and taxable income in 2024, 2025, 2026, and 2027 are as follows: Pretax accounting income Depreciation on the income statement Depreciation on the tax return Taxable income Required: Cumulative Temporary Difference Deferred Tax Liability 2024 $ 350 28 (53) $325 ($ in millions) 2025 $ 370 2026 $385 28 28 (29) (19) $369 $ 394 For December 31 of each year, determine (a) the cumulative temporary book-tax difference for the depreciable asset and (b) the balance to be reported in the deferred tax liability account. Note: Leave no cell blank, enter "0" wherever applicable. Enter your answers in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50). $ $ Beginning of 2024 End of 2024 112.00 112.00 2027 $ 420 28 (11) $ 437 End of 2025 End of 2026 End of 2027
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started