Blossom Corporation purchased a machine on January 2, 2020, for
$5000000. The machine has an estimated 5-year life with no salvage
value. The straight-line method of depreciation is being used for
financial statement purposes and the following MACRS amounts will
be deducted for tax purposes:
2020 | $1000000 | 2023 | $575000 |
2021 | 1600000 | 2024 | 575000 |
2022 | 960000 | 2025 | 290000 |
Assuming an income tax rate of 20% for all years, the net deferred
tax liability that should be reflected on Blossom's balance sheet
at December 31, 2021 be
$85000
$8000
$0
$120000
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