Ayres Services acquired an asset for $152 million in 2021. The
asset is depreciated for financial reporting purposes over four
years on a straight-line basis (no residual value). For tax
purposes the asset’s cost is depreciated by MACRS. The enacted tax
rate is 25%. Amounts for pretax accounting income, depreciation,
and taxable income in 2021, 2022, 2023, and 2024 are as
follows:
($ in millions) | ||||||||||||||||
2021 | 2022 | 2023 | 2024 | |||||||||||||
Pretax accounting income | $ | 375 | $ | 395 | $ | 410 | $ | 445 | ||||||||
Depreciation on the income statement | 38 | 38 | 38 | 38 | ||||||||||||
Depreciation on the tax return | (58 | ) | (54 | ) | (24 | ) | (16 | ) | ||||||||
Taxable income | $ | 355 | $ | 379 | $ | 424 | $ | 467 | ||||||||
Required:
For December 31 of each year, determine (a) the cumulative
temporary book-tax difference for the depreciable asset and (b) the
balance to be reported in the deferred tax liability account.
Ayres Services acquired an asset for $152 million in 2021. The asset is depreciated for financial...
Ayres Services acquired an asset for $120 million in 2021. 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 2021, 2022 2023 and 2024 are as follows: Pretax accounting income Depreciation on the income statement Depreciation on the tax return Taxable income 2021 $355 38...
Ayres Services acquired an asset for $80 million in 2021. The asset is depreciated for financial reporting purposes over four years on a straight-line basis (no residual value). For tax purposes the asset’s cost is depreciated by MACRS. The enacted tax rate is 25%. Amounts for pretax accounting income, depreciation, and taxable income in 2021, 2022, 2023, and 2024 are as follows: ($ in millions) 2021 2022 2023 2024 Pretax accounting income $ 330 $ 350 $ 365 $ 400...
Ayres Services acquired an asset for $144 million in 2021. The asset is depreciated for financial reporting purposes over four years on a straight-line basis (no residual value). For tax purposes the asset’s cost is depreciated by MACRS. The enacted tax rate is 25%. Amounts for pretax accounting income, depreciation, and taxable income in 2021, 2022, 2023, and 2024 are as follows: ($ in millions) 2021 2022 2023 2024 Pretax accounting income $ 370 $ 390 $ 405 $ 440...
Ayres Services acquired an asset for $104 million in 2021. 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 2021, 2022, 2023, and 2024 are as follows: Required: For December 31 of each year, determine (a) the temporary book-tax difference for the depreciable asset and...
Ayres Services acquired an asset for $232 million in 2021. 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 2021, 2022, 2023, and 2024 are as follows: Pretax accounting income Depreciation on the income statement Depreciation on the tax return Taxable income 2021 $425 58...
Ayres Services acquired an asset for $232 million in 2021. 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 2021, 2022, 2023, and 2024 are as follows: Pretax accounting income Depreciation on the income statement Depreciation on the tax return Taxable income 2021 $425 58...
Ayres Services acquired an asset for $160 million in 2021. The asset is depreciated for financial reporting purposes over four years on a straight line basis (no residual value). For tax purposes the asset's cost is depreciated by MACRS. The enacted tax rate is 25% Amounts for pretax accounting income, depreciation, and taxable income in 2021 2022 2023, and 2024 are as follows: 666 ($ in millions) 2022 2023 O 415 2021 $ 0 2024 Pretax accounting income Depreciation on...
Ayres Services acquired an asset for $168 million in 2021. 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 2021, 2022 2023, and 2024 are as follows: Pretax accounting income Depreciation on the income statement Depreciation on the tax return Taxable income 2021 $385 -...
Ayres Services acquired an asset for $96 million in 2021. The asset is depreciated for financial reporting purposes over four years on a straight-line basis (no residual value). Ayers deducted 100% of the asset's cost for income tax reporting in 2021. The enacted tax rate is 25%. Amounts for pretax accounting income, depreciation, and taxable income in 2021, 2022, 2023, and 2024 are as follows: ($ in millions) 2021 2022 2023 2024 Pretax accounting income $ 340 $ 360 $...
Ayres Services acquired an asset for $32 million in 2021. The asset is depreciated for financial reporting purposes over four years on a straight-line basis (no residual value). Ayers deducted 100% of the asset's cost for income tax reporting in 2021. The enacted tax rate is 25%. Amounts for pretax accounting income, depreciation, and taxable income in 2021, 2022, 2023, and 2024 are as follows: ($ in millions) 2021 2022 2023 2024 Pretax accounting income $ 490 $ 510 $...