What is the amount of the deferred tax account generated

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Reference no: EM132531932

Shuton Ltd has a depreciable asset that is estimated for accounting purposes to have a useful life of 7 years. For taxation purposes the useful life is 3 years. The asset was purchased at the beginning of year 1, there is no residual value, and the straight-line method of depreciation is used for both tax and accounting purposes. The tax rate is 30% and the cost of the asset is $210 000.

REQUIRED:

Question 1: Identify whether Shuton Ltd will incurred Deferred tax asset or liability? What is the amount of the deferred tax account generated by this asset at the end of years 3 and 4? Student required to show all calculation.

Reference no: EM132531932

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