You are a recent graduate from Texas A&M with an undergraduate degree in accounting. You have been hired for an accounting staff position at Freight Import and Export (FIE). FIE is a startup corporation that was formed by experienced executives to take advantage of the expected import and export business due to the new trade agreement with Mexico. To prepare for the upcoming year, LFIE wants to buy 20 tractor trailers. The cost of each tractor trailer is $150,000. Based on the experience of the executives, these assets are expected to have a useful life of 7 years (1,000,000-mile life) and a salvage value of 20% of the original cost. It is estimated that in the first year, each truck would be driven 100,000 miles and 150,000 miles in year 2. Although the useful life is 7 years, the company is expected to trade-in these tractors for new ones at the end of 5 years. Prior to depreciation and taxes, the companys income (revenue less expenses) is 1,500,000 and it is in the 21% corporate tax rate. The average assets of the company are $15,000,000 and the average equity is $1,000,000.

What accounting considerations will you need to consider and account for because of the temporary differences between financial (GAAP) and tax accounting? Are these difference advantages to LFIE?