What would the amount be as of december

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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%.(ignore the half-net year rule).

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: EM132948900

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