Make the necessary tax related records on december

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Blue Co. was established at the beginning of 2018. The accounting records of Blue Co. show the following data for 2018. Equipment was acquired in early January for $400.000. Straight-line depreciation over a 5-year life is used, with no residual value. For tax purposes, Blue Co. used a double declining balance depreciation method to calculate depreciation. Fines incurred for pollution violations were $5.000. Pretax financial income was $450.000. The tax rate is 20%.

Question a) Compute the taxable income, tax payable, and tax expense for the year 2018.

Question b) Make the necessary tax related records on 31 December 2018.

Reference no: EM132538467

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