Question
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
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started