Taxable Income €500,000 330,000 400,000 1. Year 2018 2019 2020 2. On January 2, 2018, heavy equipment costing €600,000 was purchased. The equipment had a life of 5 years and no residual value. The straight-line method of depreciation is used for book purposes and the tax depreciation taken each year is listed below: Tax Depreciation 2020 €90,000 2018 €198,000 2019 €270,000 2021 €42,000 Total €600,000 3. On January 2, 2019, €240,000 was collected in advance for rental of a building for a three- year period. The entire €240,000 was reported as taxable income in 2019, but €160,000 of the €240,000 was reported as unearned revenue at December 31, 2019 for book purposes. 4. The enacted tax rates are 40% for all years.
Taxable Income €500,000 330,000 400,000 1. Year 2018 2019 2020 2. On January 2, 2018, heavy equipment costing €600,000 was purchased. The equipment had a life of 5 years and no residual value. The straight-line method of depreciation is used for book purposes and the tax depreciation taken each year is listed below: Tax Depreciation 2020 €90,000 2018 €198,000 2019 €270,000 2021 €42,000 Total €600,000 3. On January 2, 2019, €240,000 was collected in advance for rental of a building for a three- year period. The entire €240,000 was reported as taxable income in 2019, but €160,000 of the €240,000 was reported as unearned revenue at December 31, 2019 for book purposes. 4. The enacted tax rates are 40% for all years.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
The following information is available for the first three years of operations for Swift Company:
(file attached)
Requirements :
1. Prepare a schedule comparing
2. Determine the
3. Prepare the
Transcribed Image Text:Taxable Income
€500,000
330,000
400,000
1. Year
2018
2019
2020
2. On January 2, 2018, heavy equipment costing €600,000 was purchased. The equipment
had a life of 5 years and no residual value. The straight-line method of depreciation is used
for book purposes and the tax depreciation taken each year is listed below:
2018
€198,000
2019
€270,000
Таx Depreciation
2020
€90,000
2021
€42,000
Total
€600,000
3. On January 2, 2019, €240,000 was collected in advance for rental of a building for a three-
year period. The entire €240,000 was reported as taxable income in 2019, but €160,000
of the €240,000 was reported as unearned revenue at December 31, 2019 for book
purposes.
4. The enacted tax rates are 40% for all years.
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