For the year ending December 31, 2020, MCD's operating activities section of its statement of cash flows showed depreciation expense of $1,751 being added and a 528 gain on the sale of fixed assets being subtracted. The investing activities section of its statement of cash flows showed proceeds from the sale of fixed assets of $104,

MCD's balance sheet showed the original cost of fixed assets as $39,051 (540,710) on December 31, 2019 (2020) and accumulated depreciation of $14,891 (516518) as of December 31, 2019 (2020) All dollar amounts are in millions

Required:

1. Companies may choose between two different methods of reporting cash provided by used in)

operating activities in their statement of cash flows. What are these two different methods and which

one is MCD using? What is your reason for this choice?

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2. Determine the book value of the fixed assets that MCD sold in 2020.

3. Determine the original cost of the fixed assets sold by MCD in 2020.

4. Determine the amount of fixed assets acquired by MCD in 2020.

5. Suppose that MCD is in the 35% income tax bracket. MCD used straight-line depreciation to get the $1,751 depreciation expense shown on the statement of cash flows. MCD uses accelerated deprecia tion on its income tax return. Suppose that accelerated deprecation was $800 more that straight-line depreciation in 2020. How much did MCD save in income taxes that year by using accelerated rather than straight-line depreciation on its tax return?

For the year ending December 31, 2020, MCD's operating activities section of its statement of cash flows showed depreciation expense of $1,751 being added and a $28 gain on the sale of fixed assets being subtracted. The investing activities section of its statement of cash flows showed proceeds from the sale of fixed assets of $104, MCD's balance sheet showed the original cost of fixed assets as $39,051 ($40,710) on December 31, 2019 (2020) and accumulated depreciation of $14,891 (S16,518) as of December 31, 2019 (2020). All dollar amounts are in millions Required: (s points each 1. Companies may choose between two different methods of reporting cash provided by (used in) operating activities in their statement of cash flows. What are these two different methods and which one is MCD using? What is your reason for this choice? 2. Determine the book value of the fixed assets that MCD sold in 2020. 3. Determine the original cost of the fixed assets sold by MCD in 2020. 4. Determine the amount of fixed assets acquired by MCD in 2020. 5. Suppose that MCD is in the 35% income tax bracket. MCD used straight-line depreciation to get the $1,751 depreciation expense shown on the statement of cash flows. MCD uses accelerated deprecia- tion on its income tax return. Suppose that accelerated deprecation was $800 more that straight-line depreciation in 2020. How much did MCD save in income taxes that year by using accelerated rather than straight-line depreciation on its tax return