Depreciation is needed only for computing income taxes. True or false?
Q: Demonstrates the difference between depreciation costs as expenses and the cash flow generated by…
A: Depreciation expense: Depreciation expense is a non-cash expense, which is recorded on the income…
Q: In which situation does the tax depreciation allow the firms to defer paying income taxes?
A: Deferment of income tax liability is also called as Deferred Tax Liability. It means tax liability…
Q: Describe the Depreciation methods for Book and Tax Depreciation?
A: Meaning of Depreciation Depreciation is an indirect expense allocated to the fixed assets showing…
Q: If the sale price executes at the price you specified, what would be the total loss, excluding…
A: Sales price when executed at the price specified will be equal to the breakeven price. Break even…
Q: What are the Gain Taxes on Asset Disposals?
A: When a asset is disposed, if the value realised on such disposal is more than the carrying amount of…
Q: igures calculate the individual depreciation an
A: We need to compute tax shield on depreciation and interest on excel.
Q: reason that depreciation is a source of cash inflow is because
A: Any fixed asset purchased has a fixed life throughout which it has to be used. Over the course of…
Q: Why do many companies use one method to calculate depreciation for the income statement prepared for…
A: Companies use different methods for tax reporting and financial reporting because by using the…
Q: From the following identify the cost that is not a cost of PPE? Professional fees Nonrefundable…
A: Property plant and machinery are the fixed assets of the company which helps in production process.…
Q: Briefly describe the tax depreciation system under MACRS.
A: MACRS is an abbreviation of the Modified Accelerated Cost Recovery System. The present U.S. tax…
Q: The factor that is not relevant in computing depreciation is
A: Depreciation is an accounting method used to allocate the cost of a tangible or physical asset over…
Q: Describe the depreciation procedures used in income taxation
A: The question deals with the depreciation procedures used in income taxation.
Q: When market value of an asset is higher than book value, depreciation is not charged. A) True B)…
A: Meaning of depression. Depreciation is a reduction in the value of asset due to wear and tear,…
Q: From the following identify the cost that is not a cost of PPE? Professional fees Nonrefundable…
A: A company's physical or tangible long-term assets having a life of at least one year are referred to…
Q: The tax treatments of assets affects the risk structure of assets True False
A: The composition of a company's asset helped in determining how the balance of long-term credits and…
Q: What is the relationship between depreciation and net income?
A: Depreciation is the part of cost of a asset which is charged to income statement yearly as a expense…
Q: EBITDA can be calculated using following formula depreciation = EBITDA + ЕBIT ammortisation EAT…
A: EBITDA means earning before interest , tax , depreciation and amortization.
Q: Which of the following expenses apply to or may be claimed by cash basis taxpayers? a. Depreciation…
A: Under a cash basis, the cash received and cash paid is considered for calculating the income and…
Q: What is meant by straight line method if charging depreciation?
A: Depreciation: Depreciation refers to the reduction in the monetary value of a fixed asset due to its…
Q: Discuss the Depreciation method for tax purposes?
A: Depreciation: Depreciation refers to the reduction in the monetary value of a fixed asset due to…
Q: What is the difference between depreciation expense and accumulated depreciation?
A: “Hey, since there are multiple questions posted, we will answer first question. If you want any…
Q: Some believe that accounting depreciation measures thedecline in the value of fixed assets. Do you…
A: Depreciation: Depreciation is a method of reducing the capitalized cost of long-lived operating…
Q: Difference between the tax treatment of the purchase of a capital asset, such as a machine vs the…
A: There are various types of expenses which is incurred by the businessman in order to conduct it…
Q: What is depreciation and amortization? What's the difference? It is an accounting concept that has…
A: Depreciation is a charge to account for a reduction in the value of a capital asset arising because…
Q: How does depreciation give tax benefits? What are the advantages of Internal Financing?
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: The disadvantage of actual cash value coverage of personal property compared to replacement cost…
A: Replacement cost coverage is the amount of money incurred in connection with the replacement of a…
Q: Given the frequently changing nature of depreciation and tax law,what must we use?
A: Depreciation: Depreciation refers to the reduction in the monetary value of a fixed asset due to…
Q: Which of the following statements about capitalizing costs is correct?A. Capitalizing costs refers…
A: There are two type of costs treatments that are being done on all type of costs being incurred. One…
Q: Which of the following is used when computing for the accounting rate of return (ARR)? a. Income…
A: The accounting rate of return is the average net income an asset is expected to generate on the…
Q: Using tax depreciation for tax purposes and straight-line depreciation for financial reporting, do…
A: Deferred tax liability is the amount of tax that is due for the period but not been paid. It arises…
Q: Explain what is meant by an accelerated depreciationmethod. Are accelerated methods more widely used…
A: The term accelerated depreciation implies that in the early years of the existence of the asset,…
Q: Illustrate the significance of depreciation and income taxes?
A: Depreciation is the charge against the usage, wear and tear or obsolescence of the asset in the…
Q: Which depreciation method is most common for financial reporting? Which depreciation method is most…
A:
Q: Why is depreciation on the income statement different from the depreciation on the balance sheet?
A: Depreciation is the reduction in the value of asset during a period of time due to wear and tear.…
Q: THe depreciation recapture provisions are designed to prevent taxpayers from converting capial gains…
A:
Q: When do the depreciation expenses lose some of their value? Why?
A: Depreciation is a process in the decrease in the value of an asset. A reduction in the value over a…
Q: Describe the method of Accounting for Depreciation and Income Taxes?
A: Generally Accepted Accounting Principles (GAAP): Generally Accepted Accounting Principles are the…
Q: How can we determine the amount of property taxes over the machine's depreciable life?
A: Depreciation indicates the fall in the historical cost of fixed assets due to normal business…
Q: Describe income tax methods of depreciation.
A: The concept of depreciation applies to both tax and accounting practices. For taxation purposes,…
Q: How does the tax depreciation methods generally permit a higher depreciation than the book…
A: Book Depreciation: Book Depreciation means the amortization expense amount which are recorded in…
Q: The income tax rates are the same for capital gains and depreciation recapture of an asset that is…
A: The question is related to true or False.The income tax rates are the same on capital gains and…
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- Which of the following statements is false? A For tax purposes, companies can use the MACRS depreciation method. B When you change a depreciation estimate, such as salvage value, you need to make an adjustment to retained earnings. C If the expected future cash flow is less than the carrying amount, the asset is considered impaired. D If an impairment loss is recorded, depreciation must be recalculated since the book value changed.Which of the following is used when computing for the accounting rate of return (ARR)? a. Income before depreciation but after taxes. b. Income after depreciation and taxes. c. Income before depreciation and taxes d. Income after depreciation but before taxes.TRUE OR FALSE? An excess tax depreciation will result to a deferred tax liability.
- THe depreciation recapture provisions are designed to prevent taxpayers from converting capial gains into ordinary income.Given the frequently changing nature of depreciation and tax law,what must we use?is less Tax on Profit on Sale of Asset and less Operating Costs (revenue and expenses) or (other cash flows)?
- What are the Gain Taxes on Asset Disposals?Which of the following statements is false? A For tax purposes, companies can use the MACRS depreciation method. B When you change a depreciation estimate, such as salvage value, you need to make an adjustment to retained earnings. C If the expected future cash flow is less than the carrying amount, the asset is considered impaired. D If an impairment loss is recorded, depreciation must be recalculated since the book value changed. The answer A is wrongWhy do many companies use one method to calculate depreciation for the income statement prepared for external reporting and and another method for income tax purposes?