| Description |
Please use the selected data in Exhibit 1 for the Samuels Corporation.
<table style="width:95%;text-align:center;border-spacing:5px; border: 1px solid black;">
<caption>Exhibit 1: Selected Data for Samuels Company (US dollar millions)</caption>
<tr style=" border: 1px solid black;"><td class="left"></td> <th>Year 3 </th> <th>Year 2</th><th> Year 1</th></tr>
<tr><td class="left">Equipment value for accounting pur poses (carr ying amount) (depreciation of
USD1,000/year)</td> <td class="right" style=" border: 1px solid black;">USD7,000</td><td class="right" style=" border: 1px solid black;">USD8,000</td><td class="right" style=" border: 1px solid black;">USD9,000</td></tr>
<tr><td class="left">Equipment value for tax purposes
(tax base)
(depreciation of USD1,429/year)</td><td class="right" style=" border: 1px solid black;">USD5,714</td><td class="right" style=" border: 1px solid black;" >USD7,143</td><td class="right" style=" border: 1px solid black;">USD8,571</td></tr>
</table><br>
Assuming a 35 percent tax rate and the selected data below for the Samuels Company, the company ’s deferred tax liability in Year 3 is closest to: |