In: Accounting
Company A started business on January 1, 20X1, and bought the following piece of equipment.
Cost of asset | $150,000 |
Useful life | 3 |
Tax rate | 21% |
20X1 estimated tax payment | 1,800 |
Depreciation for book and tax purposes is as follows:
Book | Tax | |
20X1 | 40,000 | 100,000 |
20X2 | 40,000 | 20,000 |
20X3 | 40,000 | 0 |
20X1 income statement information:
Sales | 638,000 |
Expenses (does not include depreciation expense and tax expense) | 510,000 |
What the ending balance of deferred taxes payable as of December 31, 20X1?
Depreciation as per Tax = 100000
Less : Depreciation as per Book = 40000
Tax Base of deffered tax asset = 60000
Tax Rate = 21%
Then baalnace will be 60000 x 21% = 12600
The answer is 12600