The following information is available for the first three years of operations for Cooper Company: Year Taxable Income 2017 $500,000 2018 375,000 2019 400,000 On January 2, 2017, heavy equipment costing $800,000 was purchased. The equipment had a life of 5 years and no salvage value. The straight-line method of depreciation is used for book purposes and the tax depreciation taken each year is listed below: Tax Depreciation 2017 2018 2019 2020 Total $264,000 $360,000 $120,000 $56,000 $800,000 The enacted tax rates are 40% for all years. Instructions Prepare a schedule comparing depreciation for financial reporting and tax purposes.
The following information is available for the first three years of operations for Cooper Company:
Year Taxable Income
2017 $500,000
2018 375,000
2019 400,000
On January 2, 2017, heavy equipment costing $800,000 was purchased. The equipment had a life of 5 years and no salvage value. The straight-line method of
Tax Depreciation
| 2017 | 2018 | 2019 | 2020 | Total |
| $264,000 | $360,000 | $120,000 | $56,000 | $800,000 |
The enacted tax rates are 40% for all years.
Instructions
Prepare a schedule comparing depreciation for financial reporting and tax purposes.
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