Question
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
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?
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Auditing And Systems Exam Questions And Explanations Comprehensive Covarage Of Auditing And Systems Topics
Authors: Gleim, Hillison
22nd Edition
1618544284, 978-1618544285
