Wyhowski Inc. reported income from operations, before taxes, for 2010-2012 as follows: 2010......................$210,000 2011........................240,000 2012........................280,000 When calculating

Question:

Wyhowski Inc. reported income from operations, before taxes, for 2010-2012 as follows:
2010......................$210,000
2011........................240,000
2012........................280,000
When calculating income, Wyhowski deducted depreciation on plant equipment. The equipment was purchased January 1, 2010, at a cost of $88,000. The equipment is expected to last three years and have an $8,000 . Wyhowski uses straight-line depreciation for book purposes.
For tax purposes, depreciation on the equipment is $50,000 in 2010, $20,000 in 2011, and $10,000 in 2012. Wyhowski's tax rate is 35%.
Required
1. How much did Wyhowski pay in income tax each year?
2. How much income tax expense did Wyhowski record each year?
3. What is the balance in the Deferred Income Tax account at the end of 2010, 2011, and 2012?
Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...