Jack Ross Puppet Company acquired a new plastic molding machine at the beginning of the current year at a cost of $ 396,000. The asset has a six-year useful life for financial reporting purposes and is depreciated on a straight-line basis with no residual value expected at the end of its useful life. The company uses the double-declining balance method on its income tax returns. The company is subject to a 40% tax rate. Compute the deferred tax portion of the income tax expense for the first two years.

Complete the table below to compute the straight-line book depreciation and double-declining tax depreciation method through year 2 to determine the book-tax difference.

	Depreciation Expense		Accumulated Depreciation		Basis		Book-Tax
Year	Book	Tax	Book	Tax	Book	Tax	Difference
1
2