Question

In: Accounting

Trenton Fabrication Company purchased industrial tools costing $160,000, which fall in the 3-year property class under...

Trenton Fabrication Company purchased industrial tools costing $160,000, which fall in the 3-year property class under MACRS.

Use Appendix A and Exhibit 16-9 for your reference. (Use appropriate factor(s) from the tables provided.). (Round your final answers to the nearest dollar amount.)

Required:
1. Prepare a schedule of depreciation deductions assuming:
a.

The firm uses the accelerated depreciation schedule specified by MACRS

b.

The firm uses the optional straight-line depreciation method and the half-year convention.

2.

Calculate the present value of the depreciation tax shield under each depreciation method listed in part (1). Trenton Fabrication Company’s after-tax hurdle rate is 16 percent, and the firm’s tax rate is 30 percent.

Solutions

Expert Solution

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

Trenton Fabrication Company purchased industrial tools costing $230,000, which fall in the 3-year property class under...
Trenton Fabrication Company purchased industrial tools costing $230,000, which fall in the 3-year property class under MACRS. Use Appendix A and Exhibit 16-9 for your reference. (Use appropriate factor(s) from the tables provided.). (Round your final answers to the nearest dollar amount.) Required: 1. Prepare a schedule of depreciation deductions assuming: a. The firm uses the accelerated depreciation schedule specified by MACRS b. The firm uses the optional straight-line depreciation method and the half-year convention. 2. Calculate the present value...
Trenton Fabrication Company purchased industrial tools costing $190,000, which fall in the 3-year property class under...
Trenton Fabrication Company purchased industrial tools costing $190,000, which fall in the 3-year property class under MACRS. Required: 1. Prepare a 4 year schedule of depreciation deductions assuming: a. The firm uses the accelerated depreciation schedule specified by MACRS b. The firm uses the optional straight-line depreciation method and the half-year convention. 2. Calculate the present value of the depreciation tax shield under each depreciation method listed in part (1). Trenton Fabrication Company’s after-tax hurdle rate is 8 percent, and...
Sharpe Machining Company purchased industrial tools costing $210,000, which fall in the 3-year property class under...
Sharpe Machining Company purchased industrial tools costing $210,000, which fall in the 3-year property class under MACRS. Use Appendix A and Exhibit 16-9 for your reference. (Use appropriate factor(s) from the tables provided.) Required: 1. Prepare a schedule of depreciation deductions assuming: a. The firm uses the accelerated depreciation schedule specified by MACRS. b. The firm uses the optional straight-line depreciation method and the half-year convention. 2. Calculate the present value of the depreciation tax shield under each depreciation method...
A piece of newly purchased industrial equipment costs $969,000 and is classified as seven-year property under...
A piece of newly purchased industrial equipment costs $969,000 and is classified as seven-year property under MACRS. The MACRS depreciation schedule is shown in Table 10.7. Calculate the annual depreciation allowances and end-of-the-year book values for this equipment. (Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
A piece of newly purchased industrial equipment costs $1,020,000 and is classified as seven-year property under...
A piece of newly purchased industrial equipment costs $1,020,000 and is classified as seven-year property under MACRS. The MACRS depreciation schedule is shown in MACRS Table. Required: Calculate the annual depreciation allowances and end-of-the-year book values for this equipment. (Do not include the dollar signs ($). Enter rounded answers as directed, but do not use the rounded numbers in intermediate calculations. Leave no cells blank. You must enter "0" for the answer to grade correctly.)    Beginning Year Beginning Book...
A piece of newly purchased industrial equipment costs $1,020,000 and is classified as seven-year property under...
A piece of newly purchased industrial equipment costs $1,020,000 and is classified as seven-year property under MACRS. The MACRS depreciation schedule is shown in MACRS Table.    Required: Calculate the annual depreciation allowances and end-of-the-year book values for this equipment. (Do not include the dollar signs ($). Enter rounded answers as directed, but do not use the rounded numbers in intermediate calculations. Leave no cells blank. You must enter "0" for the answer to grade correctly.)    Beginning Year Beginning...
Lori, who is single, purchased 5-year class property for $200,000 and 7-year class property for $410,000...
Lori, who is single, purchased 5-year class property for $200,000 and 7-year class property for $410,000 on May 20, 2017. Lori expects the taxable income derived from her business (without regard to the amount expensed under § 179) to be about $800,000. Lori wants to elect immediate § 179 expensing, but she doesn't know which asset she should expense under § 179. She does not claim any available additional first-year depreciation. Click here to access Exhibit 8.1 and the depreciation...
Lori, who is single, purchased 5-year class property for $200,000 and 7-year class property for $410,000...
Lori, who is single, purchased 5-year class property for $200,000 and 7-year class property for $410,000 on May 20, 2017. Lori expects the taxable income derived from her business (without regard to the amount expensed under § 179) to be about $800,000. Lori wants to elect immediate § 179 expensing, but she doesn't know which asset she should expense under § 179. She does not claim any available additional first-year depreciation. Click here to access Exhibit 8.1 and the depreciation...
Naranjo Company designs industrial prototypes for outsidecompanies. Budgeted overhead for the year was $160,000, and...
Naranjo Company designs industrial prototypes for outside companies. Budgeted overhead for the year was $160,000, and budgeted direct labor hours were 16,000. The average wage rate for direct labor is expected to be $20 per hour. During June, Naranjo Company worked on four jobs. Data relating to these four jobs follow: Job 39 Job 40 Job 41 Job 42 Beginning balance $23,300 $32,900 $19,700 $700 Materials requisitioned 19,800 20,800 12,900 15,200 Direct labor cost 10,900 17,900 7,550 6,100 Overhead is...
The following financial statements apply to Trenton Company: Year 4 Year 3 Revenues Net sales $...
The following financial statements apply to Trenton Company: Year 4 Year 3 Revenues Net sales $ 210,100 $ 175,600 Other revenues 8,600 6,600 Total revenues 218,700 182,200 Expenses Cost of goods sold 125,900 102,500 Selling expenses 19,900 17,900 General and administrative expenses 10,100 9,100 Interest expense 1,500 1,500 Income tax expense 19,300 17,300 Total expenses 176,700 148,300 Net income $ 42,000 $ 33,900 Assets Current assets Cash $ 5,400 $ 6,400 Marketable securities 1,200 1,200 Accounts receivable 36,300 31,500 Inventories...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT