Plaxo Corporation has a tax rate of 35% and uses the straight-line method of depreciation for its equipment, which has a useful life of four years. Tax legislation requires the company to depreciate its equipment using the following schedule: year 1- 50%, year 2 - 30%, year 3 - 15% and year 4 - 5%. In 2014 Plaxo purchases a piece of equipment with a four year life and an original cost of $100,000
. What amount will Plaxo record as a deferred tax asset or liability in 2010?
a. Deferred tax asset of $25,000.
b. Deferred tax liability of $25,000.
c. Deferred tax asset of $8,750.
d. Deferred tax liability of $8,750.
D
You might also like to view...
A business report must be
A) well supported. B) changed. C) developed. D) located.
John enters into a contract to paint Chad's house. When Chad decides on a color, John will buy the paint and paint the house for the price of $2,500 . Which of the following is true?
a. The common law of contracts governs because this is a mixed contract (one for services and goods). b. The common law of contracts governs because the predominant factor of the contract is for the sale of services and not goods. c. The Uniform Commercial Code governs because a sale of goods is involved. d. Both the common law and the Uniform Commercial Code will govern this contract.
Because negotiable instruments are more valuable than non-negotiable ones, it is important for buyers and sellers to be able to tell, easily and accurately, if an instrument is indeed negotiable. What six standards must an instrument meet in order for it to be negotiable?
Which of the following is/are NOT a business raw material?
A. sugar cane B. logs C. iron ore D. coal E. grease