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On May 5, Yr 1, Clifford Corporation purchased computers costing $65,000. These were the only assets placed in service during Year 1. For financial reporting

On May 5, Yr 1, Clifford Corporation purchased computers costing $65,000. These were the only assets placed in service during Year 1. For financial reporting purposes, Clifford estimated a 5 year life with a salvage value of $5,000. Clifford uses S.L. method for financial reporting purposes and calculates depreciation based on the nearest whole month. For tax, computers have a 5 year recovery period. Clifford elected out of bonus depreciation and did not elect Section 179 for the computers. Cost salvage=

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Book depreciation

8000

12000

12000

12000

12000

4000

Tax depreciation

13000

Difference (use + or -)

Favorable Or Unfavorable

Permanent/

Temporaray

can someone help break this down for me. Please put in formulas

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