MacBillpurchaseda sowing machine on January 1, 2019. For its sowing machines, MacBilluses straight-line depreciation for financial...

MacBillpurchaseda sowing machine on January 1, 2019. For its sowing machines, MacBilluses straight-line depreciation for financial reporting purposes (US GAAP) and accelerated depreciation for tax purposes. Its useful life is 3 years. Assume income before depreciation is $1,000 in 2019. MacBill has a 30% income tax rate for all years. The depreciation table is as follows:

	2019	2020	2021
Straight-Line Depreciation	$500	$500	$500
Accelerated Depreciation	$850	$450	$200

What is the tax expense on its income statements for the year 2019?

Ans: $ ________________

What is the cash amount paid for income taxes for the year 2019?

Ans: $ ________________

c. How does depreciation affect deferred tax account during 2019?

Deferred tax asset Deferred tax liability (Choose one)

Increase Decrease (Choose one)

by the amount of $ ________________

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Expert Solution

ekkarill92 answered 1 year ago

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