The following information is available for the first three years of operations for Cooper Company: Year Taxable Income 2017 $500,000 2018 375,000 2019 400,000 On January 2, 2017, heavy equipment costing $800,000 was purchased. The equipment had a life of 5 years and no salvage value. The straight-line method of depreciation is used for book purposes and the tax depreciation taken each year is listed below: Tax Depreciation 2017 2018 2019 2020 Total $264,000 $360,000 $120,000 $56,000 $800,000 The enacted tax rates are 40% for all years. Instructions Determine the deferred tax (asset) or liability at the end of 2017.
The following information is available for the first three years of operations for Cooper Company:
Year Taxable Income
2017 $500,000
2018 375,000
2019 400,000
On January 2, 2017, heavy equipment costing $800,000 was purchased. The equipment had a life of 5 years and no salvage value. The straight-line method of
Tax Depreciation
| 2017 | 2018 | 2019 | 2020 | Total |
| $264,000 | $360,000 | $120,000 | $56,000 | $800,000 |
The enacted tax rates are 40% for all years.
Instructions
Determine the
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 3 images
