Question
Bridge of Spies Corp. purchased a machine on Jan 1, 2019 for $260000. The machine has an estimated 5-year life withno salvage value. the straight-line
Bridge of Spies Corp. purchased a machine on Jan 1, 2019 for $260000. The machine has an estimated 5-year life withno salvage value. the straight-line method of depreciation is used for financial statement purposes. The following MACRS amounts will be deducted for tax purposes: 1: 52000 | 2: 83200 | 3: 49920 | 4: 29952 | 5: 29952 | 6: 14976 | The company also expensed the following amounts for warranty expense. 2019: 23000 | 2020: 26000 | 2021: 29000 | 2022: 32000 | 2023: 35000 | 2024: 38000 | 75% of the warranty expected warranty amount is spent in the same year as sales. The rest is spent in the year following sales. There were no other items causing deferred tax assets or liabilities. Assume an income tax rate of 32% for all years. The deferred tax liability of Bridge of Spies Corp.will increase in 2020 by:
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started