5. XYZ Company leased equipment to West Corporation under a lease agreement that qualifies as a capital lease to West but not as a result of a bargain purchase option or a title transfer. The present value of the asset is $610,000. The expected economic life of the asset is 10 years. The lease term is five years. Using the straight-line method, what would West record as annual depreciation?

6. The financial reporting carrying value of Boze Music's only depreciable asset exceeded its tax basis by $150,000 at December 31, 2016. This was a result of differences between straight-line depreciation for financial reporting purposes and MACRS for tax purposes. The asset was acquired earlier in the year. Boze has no other temporary differences. The enacted tax rate is 25% for 2016 and 37% thereafter. Boze should report the deferred tax effect of this difference in its December 31, 2016, balance sheet as:

7. ABC Company leased equipment to Best Corporation under a lease agreement that qualifies as a direct financing lease. The cost of the asset is $124,000. The lease contains a bargain purchase option that is effective at the end of the fifth year. The expected economic life of the asset is 10 years. The lease term is five years. The asset is expected to have a residual value of $2,800 at the end of 10 years. Using the straight-line method, what would Best record as annual depreciation?

8. For the current year ($ in millions), Centipede Corp. had $80 in pretax accounting income. This included warranty expense of $8 and $14 in depreciation expense. 1 million of warranty costs were incurred, and MACRS depreciation amounted to $37. In the absence of other temporary or permanent differences, what was Centipede's income tax payable currently, assuming a tax rate of 40%?