On January 2, 2016, Allen Company purchased a machine for $70,000. This machine has a five-year useful

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On January 2, 2016, Allen Company purchased a machine for $70,000. This machine has a five-year useful life, a residual value of $10,000, and it is depreciated using the straight-line method for financial statement purposes. For tax purposes, depreciation expense was $25,000 in 2016 and $20,000 in 2017. Allen's 2017 book income, before income taxes and depreciation expense, was $100,000, and its tax rate was 35%. Allen has no book-tax differences other than due to the machine.
Required:
If Allen has paid all its taxes related to 2016 and prior years, and made no estimated tax payments during 2017, what amount of current income tax liability would it report in its December 31, 2017, balance sheet?
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Related Book For  answer-question

Financial Reporting and Analysis

ISBN: 978-1259722653

7th edition

Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer

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