Question

Coyote Corporation purchased machinery for $30,000 with a ten-year useful life and no salvage value. Coyote...

Coyote Corporation purchased machinery for $30,000 with a ten-year useful life and no salvage value. Coyote uses straight-line depreciation for financial reporting purposes and double-declining-balance for income tax purposes. Assuming income tax rate of 30%, the temporary timing difference in the first year will result in: A) an increase in deferred tax liability of $900. B) a decrease in deferred tax liability of $900. C) an increase in deferred tax liability of $3,000.

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
At the beginning of 2021, Sheridan Co. purchased an asset for $2050000 with an estimated useful...
At the beginning of 2021, Sheridan Co. purchased an asset for $2050000 with an estimated useful life of 5 years and an estimated salvage value of $155000. For financial reporting purposes the asset is being depreciated using the straight-line method; for tax purposes the double-declining-balance method is being used. Sheridan Co.’s tax rate is 20% for 2021 and all future years. At the end of 2021, which of the following deferred tax accounts and balances is reported on Sheridan’s balance...
A company purchase an asset wiht 5- year depreciable life for 75,000 with no expected salvage...
A company purchase an asset wiht 5- year depreciable life for 75,000 with no expected salvage value. The company uses straight line depreciation for financial statement and uses double-declining for tax accounting. Assume a tax rate of 34% What is the value of the company's deferred tax account at the end of the second year? Correct Answer: 6120 Can you show me how to solve this problem?
On January 1, 2016, Knapp Corporation acquired machinery at a cost of $250,000 with a useful...
On January 1, 2016, Knapp Corporation acquired machinery at a cost of $250,000 with a useful life of 8 years using the double-declining balance method of depreciation, with a residual value of 10,000. At the beginning of 2019, a decision was made to change to the straight-line method of depreciation for the machinery. The depreciation expense for 2019 would be (round up to nearest $1) Select one: a. $26,367 b. $30,000 c. $19,094 d. $18,286
On January 1, 2016, Maria Company purchased a building and machinery that have the following useful...
On January 1, 2016, Maria Company purchased a building and machinery that have the following useful lives, salvage value, and costs. Building, 25-year estimated useful life, $9,480,000 cost, $948,000 salvage value Machinery, 10-year estimated useful life, $1,700,000 cost, no salvage value The building has been depreciated under the straight-line method through 2020. In 2021, the company decided to switch to the double-declining balance method of depreciation for the building. Maria also decided to change the total useful life of the...
For a $10,000 communications system with a useful life of 5 year and salvage value of...
For a $10,000 communications system with a useful life of 5 year and salvage value of $778, construct the annual depreciation allowance table (including depreciation amounts and book values), using double-declining depreciation method.
A machine with a 4-year estimated useful life and an estimated 15% salvage value was acquired...
A machine with a 4-year estimated useful life and an estimated 15% salvage value was acquired on January 1, year 1. The increase in accumulated depreciation for year 2 using the double-declining balance method would be Original cost × 85% × 50%. Original cost × 50%. Original cost × 50% × 50%. Original cost × 85% × 50% × 50%.
Prime, Inc., purchases $100,000 in construction machinery on January 1, Year 1. The useful life is...
Prime, Inc., purchases $100,000 in construction machinery on January 1, Year 1. The useful life is estimated to be 8 years, and the residual value is estimated to be $20,000. If the company uses the double-declining-balance method, the asset will reach its residual value in the ____ year.
Here are selected transactions for Evan’s Corporation for 2014. Jan. 1   Retired a piece of machinery that...
Here are selected transactions for Evan’s Corporation for 2014. Jan. 1   Retired a piece of machinery that was purchased on January 1, 2004. The machine cost $47,000 and had a useful life of 10 years with no salvage value. Dec. 31  Discarded a delivery truck that was purchased on January 1, 2011. The truck cost $30,000 and was depreciated based on a 6-year useful life with a $3,000 salvage value. Journalize all entries required on the above dates, including entries to update...
Lehman Corporation purchased a machine on January 2, 2017, for $4,000,000. The machine has an estimated...
Lehman Corporation purchased a machine on January 2, 2017, for $4,000,000. The machine has an estimated 5-year life with no salvage value. The straight-line method of depreciation is being used for financial statement purposes and the following MACRS amount will be deducted for tax purposes: 2017 $800,000.          TAX RATE 30% Assuming 2017 revenue is $2,500,000 please provide journal entry to record income tax expense, income tax payable and the deferred tax asset or liability.
On August 1, 2019 X company purchased furniture at $13,000. The salvage value is $1,000 and...
On August 1, 2019 X company purchased furniture at $13,000. The salvage value is $1,000 and the useful life is 5 years. X uses the sum of the year’s digits method. The depreciation expense for 2019 is ------. Select one: a. $2,000. b. $1,000. c. $1,667. d. $833. Clear my choice On July 1, 2006, X Corporation purchased factory equipment for $150,000. Salvage value $4,000. The equipment will be depreciated over ten years using the double-declining balance method. X should...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT