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25. At the beginning of 2018, Pitman Co. purchased an asset for $1,800,000 with an estimated useful life of 5 years and an estimated salvage
25. At the beginning of 2018, Pitman Co. purchased an asset for $1,800,000 with an estimated useful life of 5 years and an estimated salvage value of $150,000. For financial reporting purposes the asset is being depreciated using the double-declining-balance method; for tax purposes the straight-line method is being used. Pitman Co.'s tax rate is 40% for 2018 and all future years. At the end of 2018, which of the following deferred tax accounts and balances is reported on Pitman's balance sheet? Account a. Deferred tax asset b. Deferred tax liability c. Deferred tax asset d. Deferred tax liability Balance $156,000 $156,000 $234,000 $234,000
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