On January 1, 2007, ABC Company purchases machinery at a cost of $800,000. The useful life of
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On January 1, 2007, ABC Company purchases machinery at a cost of $800,000. The useful life of the asset is 4 years, with no salvage value expected at the end of the period. The the straight-line method of depreciation for financial reporting. The company takes the following depreciation amounts for tax purposes:
Year 2007 2008 2009 2010
Amount 380,000 145,000 140,000 135,000
The company has income before depreciation and income taxes of $500,000 in 2007. The tax rate is 30% and the company does not have any deferred taxes on 1/1/2007. What amount should be reported as deferred tax liability on 12/31/2007?
Related Book For
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
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