What is Infinity income tax payable for year one

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Question - Infinity Production acquired a new machine at the beginning of the current year. The machine cost $600,000 with no residual value expected. Infinity uses the straight-line method for financial reporting, assuming a 6-year useful life. The firm classifies the equipment as 5-year MACRS property for tax purposes using the following percentages.

Year

MACRS? (%)

1

?20.00%

2

32.00

3

19.20

4

11.52

5

11.52

6

5.76

The company is subject to a 35?% income tax rate and has no other book-tax differences. Income before depreciation and tax is presented below:

Year

Income before Tax and Depreciation

1

$350,000

2

400,000

3

470,000

4

?700,000

5

?820,000

6

?950,000

Required - What is Infinity's income tax payable for year 1?

Reference no: EM133072812

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