question archive 1-Company XYZ is based in the USA
1-Company XYZ is based in the USA
Subject:AccountingPrice: Bought3
1-Company XYZ is based in the USA. In its assets is listed an equipment with the following information:
Cost: $8,000; Useful life: 2 years; depreciation method: straight-line. Residual value at the end of the useful life: $2,000. The equipment was acquired on June 1st, 2018. The tax department considers that only 50% of the first year depreciation is tax deductible.
If the income before tax is $10,000 and the tax rate is 20% make the necessary entries to record the income tax expense for the first, the second year and the third year (December 31 is the year-end date).
