On January 2, year 2, Ross Co. purchased a machine for $70,000. This machine has a 5-year
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Question:
On January 2, year 2, Ross Co. purchased a machine for $70,000. This machine has a 5-year useful life, a residual value of $10,000, and is depreciated using the straight-line method for financial statement purposes. For tax purposes, depreciation expense was $25,000 for year 2 and $20,000 for year 3. Ross' year 3 income, before income taxes and depreciation expense, was $100,000 and its tax rate was 30%. If Ross had made no estimated tax payments during year 3, what amount of current income tax liability would Ross report in its December 31, year 3 balance sheet?
a. $25,800
b. $26,400
c. $24,000
d. $22,500
Related Book For
Intermediate Accounting Reporting and Analysis
ISBN: 978-1285453828
2nd edition
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach
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