[APPENDIX] On January 1,2010,Roxie Company purchased an asset for $137,500.For financial accounting purposes,the asset will be depreciated on a straight-line basis over five years with no residual value at the end of that time.For tax purposes,the asset will be depreciated as follows: 2010,$45,000;2011,$35,000;2012,$25,000;2013,$20,000;and 2014,$12,500.Assume that the company is subject to a 35% tax rate.
REQUIRED:
1.What is the amount of deferred tax at December 31,2010?
2.Does the deferred tax represent an asset or a liability?
3.What is the amount of deferred tax at December 31,2014?

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The Answer of [APPENDIX] On January 1,2010,Roxie Company purchased an asset for $137,500.For financial accounting purposes,the asset will be depreciated on a straight-line basis over five years with no residual value at the end of that time.For tax purposes,the asset will be depreciated as follows: 2010,$45,000;2011,$35,000;2012,$25,000;2013,$20,000;and 2014,$12,500.Assume that the company is subject to a 35% tax rate.
REQUIRED:
1.What is the amount of deferred tax at December 31,2010?
2.Does the deferred tax represent an asset or a liability?
3.What is the amount of deferred tax at December 31,2014?

[APPENDIX] on January 1,2010,Roxie Company Purchased an Asset for $137,500