Question
In: Accounting
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 agoRelated Solutions
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
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510,000
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