Find what would the amount be as of december

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Reference no: EM132951746

ABC Inc. purchased machinery and equipment in the amount of $230,000 on January 1, 2019. ABC will amortize this asset straight line over 15 years, with no salvage value. For tax purposes these assets are to be depreciated using a capital cost allowance rate of 7% each year of the original value (i.e. $225,000). ABC pays tax at a rate of 40%. (for the purposes of this quiz, ignore the half-net year rule).

Required:

Problem a) What is the amount of the temporary difference (before tax) between straight line depreciation and capital cost allowance on December 31, 2022 ?

Problem b) What would the amount be as of December 31, 2022 for any Deferred Tax Asset / Liability to be recorded for the balance sheet for ABC?

Problem c) What would the amount be as of December 31, 2023 for any Deferred Tax Asset / Liability to be recorded on the balance sheet for ABC?

Reference no: EM132951746

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