Maryland Company purchased equipment for 2,000,000 on January 1,2020 with a useful life of 5 years and a residual value of 500,000 using the straight-line method for financial statement purposes. Depreciation was P300,000 for 2020 and P200,000 for 2021 for tax purposes. Income before tax and depreciation was P3,000,000 during 2021 and the tax rate was 25%. During 2021 the entity made an estimated tax payment of 200,000. 1. What is the income tax payable on December 31,2021? a. 640,000 b. 500,000 c. 450,000 d. 675,000 2. What would be the total amount of income tax expense that is reported in the 2021 income statement? a. 675,000 b. 500,00 c. 475,000 d. 640,000
Maryland Company purchased equipment for 2,000,000 on January 1,2020 with a useful life of 5 years and a residual value of 500,000 using the straight-line method for financial statement purposes. Depreciation was P300,000 for 2020 and P200,000 for 2021 for tax purposes. Income before tax and depreciation was P3,000,000 during 2021 and the tax rate was 25%. During 2021 the entity made an estimated tax payment of 200,000. 1. What is the income tax payable on December 31,2021? a. 640,000 b. 500,000 c. 450,000 d. 675,000 2. What would be the total amount of income tax expense that is reported in the 2021 income statement? a. 675,000 b. 500,00 c. 475,000 d. 640,000
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 14P: Hunter Company purchased a light truck on January 2, 2019 for 18,000. The truck, which will be used...
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Maryland Company purchased equipment for 2,000,000 on January 1,2020 with a useful life of 5 years and a residual value of 500,000 using the straight-line method for financial statement purposes.
1. What is the income tax payable on December 31,2021?
a. 640,000
b. 500,000
c. 450,000
d. 675,000
2. What would be the total amount of income tax expense that is reported in the 2021 income statement?
a. 675,000
b. 500,00
c. 475,000
d. 640,000
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