below is the question and the template i have to fill..please provide a formula version of the excel sheet too for my better understanding
A1 x v fx A B C D E F G H 1 K ONOOPONA FINANCIAL STATEMENTS Income Reporting Income Statement Year 1 Year 2 Total Key: Mowing revenue 90,000 1,00,000 1,90,000 formula required 13 cells in column B + C Operating expenses except depreciation 45,000 50,000 95,000 manual entry 6 cells in column B + C Income before depreciation and taxes 45,000 50,000 95,000 total points 19 cells worth 5.26 pts each 9 Depreciation expense (Straight-line) 10 Operating income 11 Gain (loss) on sale of equipment 0 12 Income before taxes 13 Income tax expense (30%) 14 Net income 15 16 Reporting of Equipment 17 Balance Sheet - Assets Year 1 Year 2 18 Equipment 19 Accumulated depreciation 20 Book value 21 22 Reporting of Cash Flows 23 Statement of Cash Flows Year 1 Year 2 Total 24 Investing Activities 25 Purchase equipment 26 Sell equipment 27 Operating Activities 28 Income taxes paid amounts given in instructions, do not grade 29 30 31 321 (1515er Required a. Set up the following spreadsheet to reflect the two different methods of reporting. Notice that the rst two years of revenues and operating expenses are provided. I1. Enter the effects of the following items for Year l. [1} At the beginning of Year 1, Crist purchased for $103100 cash a lawn mower it expects to use for five years. Salvage value is estimated to be $1,000. As stated, Grist uses the straight-line method of depreciation for financial statement purposes, and the MACRS method for income tax purposes. Use formulas to calculate the depreciation expense for each method. (2} No equipment was sold during Year l; therefore, no gain or loss would be reported this year. [3} The income tax rate is 30 percent. For simplicity, assume that the income tax payable was paid in Year l. [4} Complete the schedules for income reporting, reporting of equipment, and reporting of cash flows for Year l. Use formulas for all calculations. e. Enter the effects of the following items for Year 2. (1} Crist used the mower for the entire Year 2. Enter Year 2 depreciation expense amounts for the income reporting section of your spreadsheet. [2} At December 31, Ccrist sold the lawn mower for $1. Calculate the gain or loss on the sale for the income reporting section. Use formulas to malte the calculations. [3} The income tax rate is 30 percent. For simplicity, assume that the income tax payable was paid in Year 2. (4} Complete the schedules for income reporting and reporting of cash ows for Year 2. r]. Calculate the Total columns for the income reporting and reporting of cash flows sections. e. Respond to the following: [1} In Year l, by adopting the MACRS method of depreciation for tax purposes instead of the straight-line method, what is the difference in the amount of cash paid for income taxes? (2} In the long term, after equipment has been disposed of, is there any difference in total income underthe Page 4% two methods? (3) In the long term, after equipment has been disposed of, is there any difference between total income tax expense and total income tax paid? (4) Explain why Crist Company would use two different depreciation methods, particularly the straight-line method for the financial statements and an accelerated method (MACRS) for reporting to the IRS
