$8\mathrm{.}15$ Analyzing Disclosures Regarding Fixed Assets. Exhibit $8\mathrm{.}21$ presents selected financial statement data for three chemical companies: Monsanto Company, Olin Corporation, and NewMarket Corporation. $($NewMarket was formed from a merger of Ethyl Corporation and Afton Chemical Corporation.$)$

Exhibit $8\mathrm{.}21$ Three Chemical Companies' Selected Financial Statement Data on Depreciable Assets $($amounts in millions$)($Problem $8\mathrm{.}15)$

$\backslash$table$[[,$NewMarket,Monsanto,nlin$],[,$Corporation,Company,o$.],[$Depreciable assets at cost:$],[$Beginning of year,$$752,$$$4,611,$$$1,796],[$End of year,$777,4,604,1,826],[$Accumulated depreciation:$],[$Beginning of year,$584,2,331,1,301],[$End of year,$611,2,517,1,348],[$Net income,$33,267,55],[$Depreciation expense,$27,328,72],[$Deferred tax liability relating to depreciable assets:$],[$Beginning of year,$13,267,83],[$End of year,$9,256,96],[$Income tax rate,$35\%,35\%,35\%],[$Depreciation method for financial reporting,Straight$-$line,Straight$-$line,Straight$-$line$],[$Depreciation method for tax reporting,Accelerated,Accelerated,Accelerated$]]$ Required

a$.$ Compute the average total depreciable life of assets in use for each firm.

b$.$ Compute the average age to date of depreciable assets in use for each firm at the

end of the year.

c$.$ Compute the amount of depreciation expense recognized for tax purposes for each

firm for the year using the amount of the deferred taxes liability related to

depreciation timing differences.

d$.$ Compute the amount of net income for the year for each firm assuming that

depreciation expense for financial reporting equals the amount computed in

Requirement c for tax reporting.

e$.$ Compute the amount each company would report for property, plant, and

equipment $($net$)$ at the end of the year if it had used accelerated $($tax reporting$)$

depreciation instead of straight$-$line depreciation.

f$.$ What factors might explain the difference in average total life of the assets of

NewMarket Corporation and Olin Corporation relative to the assets of Monsanto

Company?

g$.$ What factors might explain the older average age for depreciable assets of

NewMarket Corporation and Olin Corporation relative to Monsanto Company?