Elixir inc purchased equipement in 2018 for $50,000 with no residual value. On December 31, 2020 accumulated depreciation using the straight-line method for financial reporting was 15,000. for tax purposes elixir uses MACRS depreciation resulting in $35,600 in accumulated depreciation for tax purposes onDecember 31, 2020. taxable income was $100,000 for 2020 and the companies tax rate was 25%. determine the GAAP basis of equipment on December 30, 2020. determine the tax basis of equipment on December 30 2020. Assuming a different tax liability balance of 4900 on December 31, 2019 report income tax expense for 2020.

Question

Elixir inc purchased equipement in 2018 for $50,000 with no residual value. On December 31, 2020 accumulated depreciation using the straight-line method for financial reporting was 15,000. for tax purposes elixir uses MACRS depreciation resulting in $35,600 in accumulated depreciation for tax purposes onDecember 31, 2020. taxable income was $100,000 for 2020 and the companies tax rate was 25%. determine the GAAP basis of equipment on December 30, 2020. determine the tax basis of equipment on December 30 2020. Assuming a different tax liability balance of 4900 on December 31, 2019 report income tax expense for 2020.

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