26-27

On a common size basis, which of the following assets is normally largest for an electric utility? Select one A. Accounts receivable B. Inventory C. Property, Plant and Equipment D. Cash and Marketable Securities Question 27 Plaxo Corporation has a tax rate of 35% and uses the straight-line method of depreciation for its equipment, which has a useful life of four years. Tax legislation requires the company to depreciate its equipment using the following schedule: year 150%, year 2 - 30\%, year 315% and year 4 - 5\%. In 2014 Plaxo purchases a piece of equipment with a four year life and an original cost of $100,000. What amount will Plaxo record as a deferred tax asset or liability in 2014 ? Select one A. Deferred tax asset of $25,000. B. Deferred tax liability of $25,000. C. Deferred tax asset of $8,750. D. Deferred tax liability of $8,750