Ramco Tooling purchased new equipment on January 1, Year 1 for $100,000. In Year 1, Ramco took $20,000 in Sec. 179 expense on the equipment and $40,000 in bonus depreciation on the equipment. In addition, it took $15,000 in regular MACRS depreciation on the equipment in Year 1. For book purposes, Ramco estimates the useful life of the equipment is 5 years and uses straight-line depreciation.

I.

Temporary

II.

Permanent

III.

Not applicable as there is no book-tax difference

2.

Ramco Tooling purchased new equipment on January 1, Year 1 for $100,000. In Year 1, Ramco took $20,000 in Sec. 179 expense on the equipment and $40,000 in bonus depreciation on the equipment. In addition, it took $15,000 in regular MACRS depreciation on the equipment in Year 1. For book purposes, Ramco estimates the useful life of the equipment is 5 years and uses straight-line depreciation.

	I.	Favorable
	II.	Unfavorable
	III.	Not applicable as there is no book-tax difference