Question
In: Accounting
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 the firm’s tax rate is 30 percent.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
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...
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...
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...
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...
A piece of newly purchased industrial equipment costs $980,102.00 and is classified as a seven-year property...
A piece of newly purchased industrial equipment costs
$980,102.00 and is classified as a seven-year property under MACRS.
What is the book value of this piece of equipment at the end of
year 3?
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