Cant get enough of that wonderful Duff! Duff Beer is a brand of beer that began as a fictional beverage on the television show The Simpsons. In 2016 Time magazine included Duff Beer in its list of the most influential fictional companies of all time. The beer is now commercially available and sold in a handful of locations. Use the information below to answer the following problems.

a. Interest expense: $17,000

b. Cost of goods sold: $578,000

c. Selling and marketing expenses: $55,000

d. Administrative expenses: $22,000

e. Number of shares outstanding: 550,000

f. Interest income $60,000

g. Sales: $1,000,000 h.

Dividends paid: $72,000 II. Calculating Depreciation Duff purchased $200,000 worth of bottling equipment last year. The equipment is expected to last for 8 years, but falls in the MACRS 5-year asset class for depreciation purposes. Calculate the MACRS depreciation expense for the equipment that should be recorded for each year. Use the MACRS table provided on page 69 in the text.

III. Computing a Corporations Income Taxes Answer the following questions using the table below and relevant information from (I) above.

2. What is the companys taxable income?

3. How much income tax will Duff pay?

4. What is the firms marginal tax rate? Average tax rate?

5. How much did Duff save in taxes by investing in the bottling equipment?

TABLE 3-6 15% 25% 34% 35% Corporate Tax Rates $0-$50,000 $50,001-$75,000 $75,001-$10,000,000 over $10,000,000