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


At the beginning of 2010, Pitman Co. purchased an asset for $600,000 with an estimated useful life of 5 years and an estimated salvage value of $50,000. 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 2010 and all future years.

At the end of 2010, what is the book basis and the tax basis of the asset?

 

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Accounting Basics: What is the book basis and the tax basis of the asset
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