1. Duval Industries purchases $110,000 of machinery on January 1, 2020. The machinery is expected to have a 5 year useful life and a residual value of $10,000. On January 1, 2023, management determines that the equipment will last for an additional 2 years and the new residual value is $6,000. Duval uses straight-line depreciation and has a calendar year end. Instructions Calculate the 2023 depreciation expense related to this piece of machinery (place answer in space below without $ sign)

2. Mergeron Industries purchases a new delivery van. The van costs $32,000 and is expected to last 5 years. The company uses straight-line depreciation for accounting purposes. The residual value is expected to be $2,000. The summary rate is 30%.

Calculate the deferred tax liability for year one ignoring the half year rule.

3. Rousseau Corporation has the following Statement of Income for the year ended May 31, 2020:

       Sales........................................................... $1,675,200

       Cost of goods sold...................................... .     887,600

       Gross margin.............................................. ..... 787,600

       Selling & administrative expense............... ..... 241,200

       Interest expense......................................... ..      65,000

       Income before income taxes..................... ..... 481,400

       Income taxes.............................................. ..    192,500

       Net income................................................. .. $ 288,900

 

Calculate the interest-coverage ratio for Rousseau Corporation for May31, 2020