Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Cleveland Enterprises, Inc. began business on January 1, 2019. The company purchased $150,000 worth of 5-year equipment on March 1. The company uses MACRS depreciation

Cleveland Enterprises, Inc. began business on January 1, 2019. The company purchased $150,000 worth of 5-year equipment on March 1. The company uses MACRS depreciation for tax purposes and straight line depreciation for financial statement purposes. The companys net income for financial statement purposes is $300,000. Tax depreciation on the equipment is $30,000 and book depreciation is $25,000. The company earned $2,000 in interest from a tax free municipal bond. Prepare the journal entry for financial statement purposes for the companys tax expense at 12/31/19. Assume a tax rate of 21%.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Accounting

Authors: Edward B. Deakin, Michael Maher

3rd Edition

0256069190, 978-0256069198

More Books

Students also viewed these Accounting questions

Question

How can we use language to enhance skill in perceiving?

Answered: 1 week ago