Question

21% The next three questions use the below information. Problem 1, Question 1. Company A started business on January 1, 20X1, and bought the following piece of equipment. Cost of asset $150,000 Salvage 30,000 Useful life Tax rate 20X1 estimated tax payment 1,800 Depreciation for book and tax purposes is as follows: Book Tax 20x1 40,000 100,000 20x2 1 4 0,000 20,000 20x3 40,000 20x1 income statement information: Sales 638,000 Expenses (does not include depreciation expense and tax expense) 510,000 1) What is net income for 20X1?

Answer 1

Net Income For 20X1
Sales	$         6,38,000
Less:
Expenses	$         5,10,000
Depreciation	$             40,000
Income before tax	$             88,000
Less:
TaxPayment	1800
Deferred Tax Liability	12600
[21%($100000-40000)
Net Income	$             73,600
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