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What are the book basis and the tax basis of the asset

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Question - At the beginning of 2018, Pitman Co. purchased an asset for $1,800,000 with an estimated useful life of 5 years and an estimated salvage value of $150,000. For financial reporting purposes the asset is being depreciated using the straight-line method; for tax purposes the double-declining-balance method is being used. Pitman Co.'s tax rate is 40% for 2018 and all future years.

At the end of 2018, what are the book basis and the tax basis of the asset?

A. $1,320,000 $ 930,000

B. $1,470,000 $ 930,000

C. $1,470,000 $1,080,000

D. $1,320,000 $1,080,000

Reference no: EM132040161

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