Question: Ayres Services acquired an asset for 80 million in 2011

Ayres Services acquired an asset for $80 million in 2011. The asset is depreciated for financial reporting purposes over four years on a straight-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 2011, 2012, 2013, and 2014 are as follows:


For December 31 of each year, determine
(a) The temporary book–tax difference for the depreciable asset and
(b) The balance to be reported in the deferred tax liability account.

View Solution:

Sale on SolutionInn
  • CreatedJuly 05, 2013
  • Files Included
Post your question