Ayres Services acquired an asset for $82 million in 2018. The asset is depreciated for financial reporting purposes over four years on astraight-line basis (no residual value). For tax purposes the asset's cost is depreciated by MACRS. The enacted tax rate is 40%.Amounts for pretax accounting income, depreciation, and taxable income in 2018, 2019, 2020, and 2021 are as follows:Pretax accounting incomeDepreciation on the income statementDepreciation on the tax return.Taxable income.($ in millions)2019355 $20.5(33.5)Temporary DifferenceDeferred Tax Liability2018$ 335 $20.5(25.5)$ 330 $ 342 $ 3752020 2021370 $ 40520.5 20.5(15.5) (7.5)$ 418Required:Determine (a) the temporary book-tax difference for the depreciable asset and (b) the balance to be reported in the deferred taxliability account. (Leave no cell blank, enter "0" wherever applicable. Show all amounts as positive amounts. Enter your answers inmillions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).)Beginning of 2018 End of 2018 End of 2019 End of 2020 End of 2021

Deferred Tax Liability ;-A deferred tax liability refers to an accounting concept that arises due to…

Required: Determine (a) the temporary book-tax difference for the depreciable asset and (b) the balance to be reported in the deferred tax liability account. (Leave no cell blank, enter "0" wherever applicable. Show all amounts as positive amounts. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).)

Required: Determine (a) the temporary book-tax difference for the depreciable asset and (b) the balance to be reported in the deferred tax liability account. (Leave no cell blank, enter "0" wherever applicable. Show all amounts as positive amounts. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).)

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 5MC: At the beginning of 2019, Conley Company purchased an asset at a cost of 10,000. For financial...

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