Question
North Dakota Corporation purchased a machine for $20,000 in January 2021. North Dakota records a full year depreciation on assets in the year of purchase,
North Dakota Corporation purchased a machine for $20,000 in January 2021. North Dakota records a full year depreciation on assets in the year of purchase, and their year ends December 31st. For financial reporting purposes, North Dakota depreciates the machine on a straight-line basis over a four-year period. There is no residual value. For tax purposes, depreciation expense on the machinery is 50% of cost in 2021, 30% in 2022, and 20% in 2023. Pretax accounting income for 2021 was $150,000, which includes interest revenue of $20,000 from municipal bonds. The enacted tax rate is 30% for all years. There are no other differences between accounting and taxable income. Current income taxes payable at December 31, 2021 are:
A)
$42,000
B)
$37,500
C)
$43,500
D)
$45,000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started