Reference no: EM132651219

Question a. A vehicle is purchased for a cost of $50,000 with a $5,000 residual value and assigned a five year life. Calculate Ubook" depreciation expense using the straight-line method and the 200% declining balance method.

Question b. Using the information above, calculate "tax" depreciation expense for each of the five years using the bonus depreciation allowed with the 2018 change to the tax code.

Question c. Compare the straight-line "book" and "tax" depreciation expense for years 1, 2 and 3. Calculate the deferred tax impact (assume a 21% federal tax rate) for each year and indicate the net balance in the deferred tax liability account at year end.