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Your client, a publically-traded company, in 2019 acquires $2.5million of fixed assets. All of these assets are 5 year class MACRSproperty. The first three years of MACRS depreciation are: FirstYear $625,000; Second Year 750,000; Third Year $450,000. For bookpurposes, the company uses a 10 year useful life, straight-linedepreciation with no salvage value. Obviously, these assets willcreate a DTL. How should the DTL be presented for these assets atthe end of year 2? Ignore partial year depreciation and assume a21% tax rate.a. $105, 000 Long-Term; $78,750 Short-Termb. $78,750 Long-Term $105,000 Short-Termc. $183,750 Long-Termd. None of the above
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