A company is scheduling temporary differences for the purpose of computing deferred taxes. The company compared tax
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A company is scheduling temporary differences for the purpose of computing deferred taxes. The company compared tax basis assets and liabilities with book basis assets and liabilities and accumulated the following temporary differences.
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Temporary difference Depreciable assets $240,000 Inventory amounts capitalized 20,000 under Section 263A Estimated litigation 225,000 The book value of depreciable assets is recovered over the next three years at a rate of $80,000 per year. Inventory amounts are recovered in the first future year. The estimated litigation will be settled over the next four years in the following manner:
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