Plaxo Corporation has a tax rate of 35% and uses the straigh…
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 1- 50%, year 2 – 30%, year 3 – 15% and year 4 – 5%. On January 1, Year 1 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 on the December 31, Year 1 balance sheet?