Company A started business on January 1, 20X1, and bought the following piece of equipment. Cost...

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?

Solutions

Expert Solution

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

ekkarill92 answered 2 years ago

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