Company B acquired the following piece of equipment. Your staff accountant computed the book and tax...

Company B acquired the following piece of equipment. Your staff accountant computed the book and tax depreciation. It is up to you to determine the deferred tax amounts.

Equipment cost	$50,000
Salvage	5,000
Useful life	5
Tax rate	21%

Depreciation for book and tax purposes is as follows:

	Book	Tax
20X1	9,000	20,000
20X2	9,000	12,000
20X3	9,000	7,200
20X4	9,000	4,320
20X5	9,000	1,480

What is the deferred taxes payable balance as of December 31, 20X3?

Expert Solution

The Deffered Taxes payable for December 31, 2003 will be

Depreciation claim as per Books = $ 9,000

Less Depreciation Allowed as per income Tax $7,200

Additional income for Tax purpose $1,800

Deffered Taxes payable @ 21% $378

ekkarill92 answered 2 years ago

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Company B acquired the following piece of equipment. Your staff accountant computed the book and tax...

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