Compute ptrs book and tax basis in the equipment

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Problem - Several years ago, PTR purchased business equipment for $50,000. PTR's accumulated book depreciation with respect to the equipment is $37,200, and its accumulated tax depreciation is $41,000.

a. Compute PTR's book and tax basis in the equipment.

b. Using a 21 percent tax rate, compute PTR's deferred tax asset or liability (identify which) resulting from the difference between accumulated book and tax depreciation.

c. Compute PTR's book and tax gain if it sells the equipment for $14,750.

d. Explain the effect of the sale on the deferred tax asset or liability computed in b.

Reference no: EM132472244

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