At the beginning of the year a company purchased a
At the beginning of the year a company purchased a fixed asset for $500,000 with no expected residual value.The company depreciates similar assets on a straight-line basis over 10 years while the tax authorities allow depreciation at the rate of 15% per year.In both cases the company takes a full year’s depreciation in the first year.At the end of the year, the tax base and temporary difference in the value of the asset, respectively, are closest to:
A.$425,000; $25,000.
B.$425,000; $75,000.
C.$500,000; $25,000.
参考解答
4j0***973
2024-10-16 09:04:59
Ans:A.
The net book value of the asset for accounting purposes (carrying amount) is:
[500,000 – (500,000/10) = $450,000.
The net book value for taxes (tax base) is:
500,000 - 0.15(500,000) = $425,000
The temporary difference is the difference between the net book value of the asset for accounting purposes and the net book value for taxes:
450,000 – 425,000 = $25,000.
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