Question the subsequent information is available for the

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Reference no: EM13349183

Question :

The subsequent information is available for the first three years of operations for Cooper Company:

1. Year Taxable Income

2012 $500,000

2013 360,000

2014 400,000

2. On January 2, 2012, heavy equipment costing $600,000 was purchased. The equipment had a life of 5 years and no salvage value. The straight-line technique of depreciation is used for book purposes and the tax depreciation taken each year is listed given:

Tax Depreciation

2012 2013 2014 2015 Total

$198,000 $270,000 $90,000 $42,000 $600,000

3. On January 2, 2013, $270,000 was collected in advance for rental of a building for a three-year period. The whole $270,000 was reported as taxable income in 2013, but $180,000 of the $240,000 was reported as unearned revenue at December 31, 2013 for book purposes.

4. The enacted tax rates are 40% for every year.

Required:

(a) Purpose a schedule comparing depreciation for financial reporting and tax purposes.

(b) Evaluate the deferred tax asset or liability at the end of 2012.

(d) Purpose a schedule of the deferred tax asset and liability at the end of 2013.

Reference no: EM13349183

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