Part 1

Fresno

Transportation owns a fleet of

50

semi-trucks. The original cost of the fleet was

$7,500,000.

Fresno

uses straight-line depreciation for the fleet for accounting purposes, and MACRS depreciation for tax purposes. The company had a deferred tax liability balance of

$220,000

at the end of fiscal year

2017

related to the fleet.

At the end of fiscal year

2018,

the GAAP book value of the fleet was

$6,230,000,

while the tax book value was

$5,610,000.

Fresno's

taxable income for fiscal year

2018

was

$6,400,000.

Its tax rate was

40%.

Requirements

1.	Calculate the deferred tax liability related to the fleet as of the end of fiscal year 2018.
2.	Record the tax accrual for 2018 as of the end of fiscal year 2018.