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The Company at the end of 2020, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax
The Company at the end of 2020, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income $3,000,000 Estimated litigation expense 4,000,000 Extra depreciation for taxes 16.000.000) Taxable income $ 1.000.000 The estimated litigation expense of $4,000,000 will be deductible in 2021 when it is expected to be paid. Use of the depreciable assets will result in taxable amounts of $2,000,000 in each of the next three years. The Income tax rate is 30% for all years The amount of deferred tax liability to be recognized is 51.200,000 51.800.000 $900,000 51.500.000
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