Ayres Services acquired an asset for $80 million in 2024. 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 25%. Amounts for pretax accounting income, depreciation, and taxable income in 2024, 2025, 2026, and 2027 are as follows:

Required:
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.

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Pretax accounting income Depreciation on the income statement Depreciation on the tax return Taxable income 2024 $330 20 (25) $325 ($ in millions) 2025 $350 20 (33) $337 2026 $365 20 (15) $370 2027 $400 20 (7) $413