An asset used in a four-year project falls in the five-year
MACRS class for tax purposes. The asset has an acquisition cost of
$6,050,000 and will be sold for $1,250,000 at the end of the
project. If the tax rate is 25 percent, what is the aftertax
salvage value of the asset? Refer to Table 8.3. (Do not
round intermediate calculations and enter your answer in dollars,
not millions of dollars, rounded to 2 decimal places, e.g.,
1,234,567.89.)
An asset used in a four-year project falls in the five-year
MACRS class for tax purposes. The asset has an acquisition cost of
$4,750,000 and will be sold for $1,375,000 at the end of the
project. If the tax rate is 24 percent, what is the aftertax
salvage value of the asset? Refer to Table 10.7. (Do not
round intermediate calculations and enter your answer in dollars,
not millions of dollars, e.g., 1,234,567.)
What is the:
After-tax salvage value:
An asset used in a 4-year project falls in the 5-year MACRS
class for tax purposes. The asset has an acquisition cost of
$8,400,000 and will be sold for $2,040,000 at the end of the
project. If the tax rate is 23 percent, what is the aftertax
salvage value of the asset? Refer to (MACRS schedule) (Do
not round intermediate calculations and enter your
answer in dollars, not millions of dollars, rounded to the nearest
whole number.
Answer the following questions:
How might the MACRS system be beneficial for tax purposes for
individuals and/or businesses?
Why would businesses utilize straight-line depreciation for
their financial statements and MACRS for their tax accounting?
For financial accounting purposes, there are four commonly used
depreciation methods. MACRS is not allowed under GAAP - only for
income tax purposes. What are the four methods? How is depreciation
calculated under each method? What would be the journal entry for
recording deporeciation expense for each method?
For Tax Year 2020 and beyond, what method will be used to
calculate the kiddie tax?
The parents' marginal tax rate.
Trust rates.
Whichever method provides for the higher tax.
Whichever method provides for the lower tax.
Prepare a depreciation schedule to be used for tax purposes for
a $60,000 dump truck using the 200% declining-balance method and
the mid-year convention.