Question
The MacCauley Company has the following information available 200 million in sales Total Expenses $130 million (excluding depreciation) Straight line depreciation is $15 million and
The MacCauley Company has the following information available
200 million in sales
Total Expenses $130 million (excluding depreciation)
Straight line depreciation is $15 million and the maximum accelerated depreciation allowed by law is $25 million
Assume all taxable income is 40%. Assume that net working capital remains constant
a) Calculate the after tax operating cash flow using both straight line and accelerated depreciation
b) Assuming that the company uses straight line depreciation for book purposes and accelerated depreciation for tax purposes, show the income statement reported to stockholders. What is the after tax operating cash flow under these circumstances?
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
