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1. Equipment was purchased 4 years ago for $600,000. Depreciation is calculated 15% and 25%...

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Accounting

1. Equipment was purchased 4 years ago for $600,000. Depreciation is calculated 15% and 25% straight-line for accounting purposes and tax purposes respectively. Calculate the Carrying Amount , Tax Base and TTD/DTD for this situation.

2. With reference to your calculations in Question 1, explain why there is a difference between the Carrying Amount and the Tax Base? What effect does the TTD/DTD have on next year's income tax payable?

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