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The MACRS depreciation system is used for tax purposes, and the straight-line depreciation method is used for financial reporting purposes for some plant assets. For each item below, indicate whether it involves: 1. A temporary difference that will result in future deductible amounts and, therefore, will usually give rise to a deferred income tax asset.2. A temporary difference that will result in future taxable amounts and, therefore, will usually give rise to a deferred income tax liability.3. A permanent difference.

The MACRS depreciation system is used for tax purposes, and the straight-line depreciation method is used for financial reporting purposes for some plant assets. For each item below, indicate whether it involves: 1. A temporary difference that will result in future deductible amounts and, therefore, will usually give rise to a deferred income tax asset.2. A temporary difference that will result in future taxable amounts and, therefore, will usually give rise to a deferred income tax liability.3. A permanent difference.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The MACRS depreciation system is used for tax purposes, and the straight-line depreciation method is used for financial reporting purposes for some plant assets.


For each item below, indicate whether it involves:

1. A temporary difference that will result in future deductible amounts and, therefore, will usually give rise to a deferred income tax asset.
2. A temporary difference that will result in future taxable amounts and, therefore, will usually give rise to a deferred income tax liability.
3. A permanent difference.

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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation
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