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Pharoah Corporation purchased a machine on January 2, 2020, for $3200000. 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 $640000 2023 $368000 2021 1024000 2024368000 2022 614400 2025185600 Assuming an income tax rate of 20% for all years, the net deferred tax liability that should be reflected on Pharoah's balance sheet at December 31, 2021 be

Respuesta :

Answer:

$76,800

Explanation:

The computation of the net deferred tax liability is as follows:

Straight line depreciation is

= $3,200,000 ÷ 5

= $640,000

Now

Deferred tax liability for 2021

= ($1,024,000 - $640,000) × 0.20

= $76,800

hence, the net deferred tax liability that should be reflected on Pharoah's balance sheet at December 31, 2021 be $76,800

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