Question:XYZ Company purchases a machine early in Year 1. For book purposes, XYZ Company uses straight-line depreciation. For tax purposes, the company follows ACRS. Excess depreciation for tax purposes in Year 1 is $36,000. Assume that a tax rate of 30 percent will apply in the future period of taxable income. For Year 2, excess depreciation for tax purposes is $18,000. In Year 2, XYZ Company reported a current liability for income taxes of $39,000.

Given the above information, what amount of income tax expense did XYZ Company report on its Year 2 Income Statement? 

A $39,000 
B $44,400 
C $33,600 
D $49,800 

+ Answer
D 

+ Explanation
Answer not sure

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Md. Habib Ullah

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