Gillock,Inc

Multiple Choice

Gillock,Inc.uses MACRS for its income tax returns and straight line depreciation for its financial statements.The company purchased 5 year property on January 1,2016 that cost $130,000 and has a $10,000 salvage value and an expected 8 year useful life.There is a depreciation percentage of 20% for the first year for 5-year property,for tax purposes.The company would show which of the following on its financial records?

A) less depreciation expense on the tax return than on the income statement.
B) the same amount of depreciation expense for financial reporting as for income tax preparation.
C) depreciation expense of $26,000 on the income statement and $15,000 on the tax return.
D) a deferred tax liability.