Question

3 Same fact pattern as Questions 1 and 2. Problem 1, Question 3. 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 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 40,000 0 20X1 income statement information: Sales 638,000 Expenses (does not include depreciation expense and tax expense) 510,000 20X3 3) What is the deferred taxes payable balance as of December 31, 20X1?

Answer 1

3)	Depreciation as per tax laws		$                      1,00,000
	Less:
	Depreciation as per book		$                          40,000
	Tax Base For Deferred Tax Liability		$                          60,000
	Deferred tax payable = Tax base * tax rate
	=$60000*21%
	=$12600