Answered

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The next three questions use the below information. Company A started business on January 1, 20X1, and bought the following piece of equipment. Cost of asset $150,000 Useful life 3 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 20X3 40,000 0 20X1 income statement information: Sales 638,000 Expenses (does not include depreciation expense and tax expense) 510,000 What is net income for 20X1?

Sagot :

Tundexiidn

Answer:

$69,520

Explanation:

"Note: Let assume salvage value is $3,000"

             Company A

       Income Statement

       For the year 20X1

Sales                          $638,000

Expenses                   $510,000

Depreciation              $40,000   [(150,000-30,000)/3}

Income before tax     $88,000

Income tax at 21%      $18,480

Net Income                $69,520

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