Financial Account Liberty Contractors records depreciation of $50,000 per year for threeyears. For tax purposes, the company has the following schedule ofdepreciation expense:=Year 1 $62,000Year 2 $50,000=Year 3 = $38,000Assume that each year Liberty makes $120,000 of income beforedepreciation expense and that the company has a 40% effective tax rate.What is the amount of tax expense, tax liability, and deferred tax liabilityfor Year 2?

Given DataDepreciation (Book): $50,000 per yearDepreciation (Tax):Year 1: $62,000Year 2: $50,000Year…

Answered: Liberty Contractors records…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter15: Choice Of Business Entity—other Considerations

Section: Chapter Questions

Problem 72P

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Liberty Contractors records depreciation of $50,000 per year for three years. For tax purposes, the company has the following schedule of depreciation expense: = Year 1 $62,000 Year 2 $50,000 = Year 3 = $38,000 Assume that each year Liberty makes $120,000 of income before depreciation expense and that the company has a 40% effective tax rate. What is the amount of tax expense, tax liability, and deferred tax liability for Year 2?
Please given answer general accounting
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