Milo Manufacturing uses straight-line depreciation for financial statement reporting and is able to deduct 100% of the cost of equipment in the year the equipment is purchased for tax purposes. Four years after its purchase, one of Milo's manufacturing machines has a book value of $860,000. There were no other temporary differences and no permanent differences. Taxable income was $36 million and Milos tax rate is 25%. What is the deferred tax liability to be reported in the balance sheet? Assuming that the deferred tax liability balance was $251,000 the previous year, prepare the appropriate journal entry to record income taxes this year..

1. Milo Manufacturing uses straight-line depreciation for financial statement reporting and is able
to deduct 100% of the cost of equipment in the year the equipment is purchased for tax purposes.
Four years after its purchase, one of Milo's manufacturing machines has a book value of
$860,000. There were no other temporary differences and no permanent differences. Taxable
income was $36 million and Milos tax rate is 25%.
What is the deferred tax liability to be reported in the balance sheet? Assuming that the deferred
tax liability balance was $251,000 the previous year, prepare the appropriate journal entry to
record income taxes this year.