Calculate the amount of depreciation expense

Reference no: EM133325597

Case: Arizona Company purchased a piece of equipment last year for $300,000, with a useful life of five years and no salvage value. The depreciation expense recorded for tax purposes will be $72,000 in Year 2. The company uses the straight-line method of depreciation for reporting purposes.

Question 1: Calculate the amount of depreciation expense for reporting purposes for Year 2.

Question 2: What will be the net book value of the equipment reported on the balance sheet at the end of Year 2?

Question 3: What amount will be added to the deferred tax account as a result of the depreciation timing difference?

Reference no: EM133325597

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