Abc company shows book income of 10000 before tax the

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ABC company shows book income of $10,000 before tax. The depreciation expense for the year on equipment used in arriving at that net income on the financial statements was $1,000. However, on the tax return ABC was allowed to deduct $1,500 of depreciation expense on the equipment for the year. Compute the following:
1) Tax expense on the financial statements

2) Taxes paid to the federal government assuming a 30% tax rate.

3) The amount of deferred tax asset or liability on the balance sheet - note the amount and whether the item is a deferred tax asset or a deferred tax liability.

Reference no: EM13600845

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