Question

Smith Company reported $350,000 in book income before income tax during 20X1, its first year of operation. The tax depreciation exceeded its book depreciation by $30,000. The tax rate for 20X1 and all future years was 21%. If Smith paid no estimated taxes, what amount of income tax payable should Smith report in its December 31, 20X1, balance sheet

Answer 1

$73,500

Step-by-step explanation:

Income tax payable = Book income before income tax*Tax rate

Income tax payable = $350,000*21%

Income tax payable = $73,500

Therefore, the amount of income tax payable that Smith should report in its December 31, 20X1, balance sheet is $73,500