Mallow Inc.,which has a 35% tax rate,purchased a new business asset.First-year book depreciation was $37,225,and first-year MACRS depreciation was $55,025.As a result of this book/tax difference,Mallow recorded a $6,230 deferred tax asset.

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The deferred tax asset should be calculated as the tax rate multiplied by the difference between book and tax depreciation. The difference is $17,800 ($55,025 - $37,225), and 35% of that is $6,230, which would be a deferred tax liability, not an asset.