Brief Exercise 16-3 (Static) Temporary difference for asset 100% depreciated in year of purchase; financial statement effects [LO16-2] Milo Manufacturing uses straight-line depreciation for financial statement reporting and is able to deduct 100% of the cost of equipment in the year the equipment is purchased for tax purposes. Four years after its purchase, one of Milo's manufacturing machines has a book value of $600,000. There were no other temporary differences and no permanent differences. Taxable incom was $10 million and Milo's tax rate is 25%. What is the deferred tax liability to be reported in the balance sheet? Assuming that the deferred tax liability balance was $175,000 previous year, prepare the appropriate journal entry to record income taxes this year. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. What is the deferred tax liability to be reported in the balance sheet? Note: Enter your answer in whole dollars