Thread: accounting on tax problem...

Our professor gave us this problem, with actually little information on hand... It's really hard, it's like breaking a code, so i decided to bring it out here, and maybe i could get help...

Here it is:

Carry Amt. FutureTaxableAmt. FutureDeductibleAmt. TaxBase

60,000 60,000 108,000 108,000

Yearly depreciation for acctng: 25%
Yearly depreciation for Tax: 20%

Useful life is 4 years, and he said it's on its third, the data is as at the end of 2nd year...

Here's my analysis:

FTA=Accounting CA > Tax CA (deferred liability)
FDA=Accounting CA < Tax CA (deferred Asset)

it means that there are not only one asset that is being depreciated but about two or more...
but i assumed 2 assets, with different kind of tax depreciation each...

if u like challenges, do this...

"i assumed 2 assets, with different kind of tax depreciation"

Investment related?
Business related?
Individual or entity; Type of entity?
Purchase price (and/or basis)?
Maintenance expenditures to date?
Type of business? (example: retail, petroleum tax rules differ from active service business)
Livestock goods?
Manufacturing?
Years in question? (example: computer equipment expense or old depreciation rules)