At the end of 20X8, Bent Angel Ltd.'s statement of financial position showed equipment at a total cost of $3,500,000. The equipment was being amortized at 10% per year, straight-line, and was 40% depreciated at the end of 20X8. The income tax files showed UCC for the equipment of $700,000. The statement of financial position also showed an asset of $330,000 for unamortized development costs. The development costs had been incurred in previous years, and all costs had been deducted for income tax purposes in those prior years.
In 20X9, the company acquired an additional $450,000 in equipment while scrapping equipment that originally cost $200,000. CCA claimed for 20X9 was $130,000. The company amortized $55,000 of the development cost asset.
The company pays income tax at a rate of 40%.
Assume 1st-year convention, based on 40% depreciation.
Required:
1. What are the accounting basis and the tax basis of the equipment and of the development cost asset at the end of each of 20X8 and 20X9? (Enter answers in thousands. Round answers to one decimal place. Leave no cells blank - be certain to enter "0" wherever required.)
2. What is the cumulative temporary difference for each item, and the balance of the deferred income tax account at the end of each year? (Enter answers in thousands. Amounts to be deducted should be indicated with a minus sign. Round temporary difference answers to one decimal place and Deferred income tax amount to two decimal places.)
3. This part of the question is not part of your Connect assignment.