The Strawcab Company owns one depreciable asset. The asset originally had a depreciable life of 6 years. It is 4 years old at the end of the current year. It had an estimated salvage value of \(\$ 4,000\) when new. This estimate has not changed. The company uses sum-of-the-years'-digits depreciation on its tax return and straight-line depreciation on its firıancial statements. The company's income tax rate is 40 percent of pretax taxable income. The footnotes to the financial statements indicate that the only cause of timing differences between the financial statements and tax returns is depreciation and that the income tax expense differs from income taxes payable by \(\$ 1,200\).

a Which is larger this year, income taxes payable or income tax expense, and by how much?

b What is the acquisition cost of the asset?

c Assume the same general facts as above except the asset had an original depreciable life of 8 years, is 2 years old at the end of the current year. and has an estimated salvage value of \(\$ 2,000\). The difference between income tax expense and income taxes payable this year was reported to be \(\$ 1,600\). Repeat parts a and \(\mathbf{b}\).