Answer:
Amount of $ in millions.
Beginning of 2021 | End of 2021 | End of 2022 | End of 2023 | End of 2024 | |
Cumulative Temporary Difference | $ - | $ -24.00 | $ -28.00 | $ -18.00 | $ - |
Deferred Tax liability | $ - | $ 6.00 | $ 7.00 | $ 4.50 | $ - |
Workings:
$ in Millions | ||||
2021 | 2022 | 2023 | 2024 | |
a) Pre-tax accounting income | $ 335.00 | $ 375.00 | $ 390.00 | $ 425.00 |
b) Depreciation on income statement | $ 30.00 | $ 30.00 | $ 30.00 | $ 30.00 |
c) Depreciation on tax return | $ -54.00 | $ -34.00 | $ -20.00 | $ -12.00 |
d) Temporary differences (b+c) | $ -24.00 | $ -4.00 | $ 10.00 | $ 18.00 |
e) Cumulative Temporary Difference | $ -24.00 | $ -28.00 | $ -18.00 | $ - |
f) Tax rate | 25% | 25% | 25% | 25% |
g) Deferred Tax liability (e*f) | $ 6.00 | $ 7.00 | $ 4.50 | $ - |
Thank you.
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