What net deferred tax liability that should be reflected

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Crane Corporation purchased a machine on January 2, 2020, for $3900000. The machine has an estimated 5-year life with no salvage value.

The straight-line method of depreciation is being used for financial statement purposes and the following MACRS amounts will be deducted for tax purposes:

2020          $780000

2023         $448500

2021        1248000

2024         448500

2022         748800

2025          226200

Problem 1: Assuming an income tax rate of 20% for all years, the net deferred tax liability that should be reflected on Crane's balance sheet at December 31, 2021 be

Option 1: $66300

Option 2: $6240

Option 3: $0

Option 4: $93600

Reference no: EM132999020

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