Question
I need to do a reconciliation between the book and the income tax adjustments. I have a question about tax depreciation. Tax depreciation was $350,000
I need to do a reconciliation between the book and the income tax adjustments. I have a question about tax depreciation.
Tax depreciation was $350,000 before any cost recovery associated with depreciable fixed assets purchased in 2020
Recovery Period Placed in Service Date Original Basis 5-year MACRS property (cars, computers)May 17, 2020 $110,000 7-year MACRS property (furniture and fixtures)July 9, 2020 $730,000
My Solution
- 110000 x 20%= 22000
- 730000 x14.29%=104317
- 350000+22000+104317=416317 tax depreciation vs 278500 book depreciation = 197817 favorable book adjustment
Could you please explain what is wrong with my answer.
Thank you
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Financial Accounting
Authors: Jamie Pratt, Michael F Peters
11th Edition
1119745322, 978-1119745327
