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Company A started business on January 1, 20X1, and bought the following piece of equipment. Cost of asset $150,000 Useful life 3 Tax rate 21% 20X1 estimated tax payment 1,800 Depreciation for book and tax purposes is as follows: Book Tax 20X1 40,000 100,000 20X2 40,000 20,000 20X3 40,000 0 20X1 income statement information: Sales 638,000 Expenses (does not include depreciation expense and tax expense) 510,000 What is ending taxes payable on the December 31, 20X1 balance sheet?

Respuesta :

Answer:

the ending tax payable as on Dec 31,20X1 is $12,600

Explanation:

The computation of the ending tax payable as on Dec 31,20X1 is as follows:

Depreciation as per Tax = $100,000

Less : Depreciation as per Book = $40,000

Tax Base of deferred tax asset = $60,000

Tax Rate = 21%

So,  

= $60,000 ×  21%

= $12,600

Hence, the ending tax payable as on Dec 31,20X1 is $12,600

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