Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A company is using the combination of SL and DB depreciation we used in class to depreciate an asset over 10 years to a salvage

image text in transcribed
image text in transcribed
A company is using the combination of SL and DB depreciation we used in class to depreciate an asset over 10 years to a salvage value of $40,000. For the DB depreciation, the company is using =0.15. a. (6 pts) Assume that the book value after year 8 is $100,000. (Since we do not know the initial book value, this is an assumed number. Do not try to "reverse engineer" arriving at this value.) If we wanted to fill out a table similar to that used in class, what are the values of W,X,Y, and Z in Table 6.1? Present values to the nearest dollar, but be sure to show your work. Table 6.1. Table referenced in Problem 6a 6 b. (5 pts) In year 9 , the company has revenues of $500,000, and must pay taxes on this revenue ($500,000) minus the depreciation of the asset in the year (see Table 6.1), where the tax table is presented in Table, 6.2 . Table 6.2. Tax table to be used for Problem 6b (Note: these are not real brackets and rates: thev are modified to make calculations slightlv easier What taxes must the company pay in year 9 ? Present your answer to the nearest dollar

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions