Pratt Inc. reported $198,300 book depreciation on its financial statements and deducted $256,000 MACRS depreciation on its tax return. As a result, Pratt has a $57,800:

Question

Quizplus · Accepted Answer

The difference between book depreciation and MACRS depreciation is a temporary difference, as it will reverse over time. Since MACRS depreciation is higher, it results in a lower taxable income, which is favorable.

Pratt Inc Reported $198,300 Book Depreciation on Its Financial Statements and and Deducted