M Company purchased a new Twinky Stuffing machine on January 1, 2019 for $160,000. The machine will last for 8 years and then be worthless. For financial reporting purposes, the company uses straight-line depreciation. (The company takes year depreciation in the year of purchase and in the year of sale). The Twinky Stuffer is considered 5-year property for tax purposes. The tax rate is 30% and the company pays current year taxes in the following year. The MACRS percentages for 5-year property are: 20.00; 32.00; 19.20; 11.52; 11.52; and 5.76. The company receives $10,000 in municipal bond interest each year. The company earned $300,000 before depreciation and taxes. (You may use this $300,000 income before depreciation and taxes for future years, also). The tax expense for 2019 will be

	A.	$ 54,180
	B.	$ 58,800
	C.	Some other number
	D.	$ 63,000
	E.	$ 60,600

The taxes payable at the end of 2020 (second year) will be A. $ 58,800 B. $ 63,000 C. $ 54,180 D. $ 54,800 E. Some other number The credit balance in deferred taxes at the end of 2020 (second year) will be A. $ 4,620 B. Company would have a debit balance in deferred tax at the end of the second year C. $ 11,172 D.$ 6,552 E. Some other number The ROE, when compared to the ROA is a measure of A. How the company is doing unilaterally B. Management effectiveness C. the effectiveness of the use of leverage D. Long-term liquidity E. short-term liquidity Leverage is: A. $ 185,690 B. The inverse of the P/E divided by the EPS C. The EPS divided by the P/E D. a measure of how the company is relying on borrowed money E. a measure of the effectiveness of shareholder input