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Telstar Communications is going to purchase an asset for $660,000 that will produce $320,000 per year for the next four years in earnings before depreciation and taxes. The asset will be depreciated using the three-year MACRS depreciation schedule in Table 12- 12. (This represents four years of depreciation based on the half-year convention.) The firm is in a 25 percent tax bracket. Fill in the schedule below for the next four years. Earnings before depreciation and taxes Depreciation Earnings before taxes Taxes Earnings after taxes Depreciation Cash flow $ $ $ Year 1 0 $ 0 0 S $ Year 2 0 $ 0 $ 0 $ Year 3 0 $ 0 $ $ Year 4 0 0 0

Telstar Communications is going to purchase an asset for $660,000 that will produce $320,000 per year for the next four years in earnings before depreciation and taxes. The asset will be depreciated using the three-year MACRS depreciation schedule in Table 12- 12. (This represents four years of depreciation based on the half-year convention.) The firm is in a 25 percent tax bracket. Fill in the schedule below for the next four years. Earnings before depreciation and taxes Depreciation Earnings before taxes Taxes Earnings after taxes Depreciation Cash flow $ $ $ Year 1 0 $ 0 0 S $ Year 2 0 $ 0 $ 0 $ Year 3 0 $ 0 $ $ Year 4 0 0 0

Accounting (Text Only)
Accounting (Text Only)
26th Edition
ISBN:9781285743615
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter6: Accounting For Merchandising Businesses
Section: Chapter Questions
Problem 6.7BPE
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Table 12-12 Depreciation percentages (expressed in decimals) Depreciation 3-Year Year MACRS 11 2 3 5 6 7 NEMEN MEHREMESELNE 9 आआआआआआ EEEEE 15 E EVENEMEN MEMENER 21 GALERIE 300 SATSARE SE SE SENSE TEPP GEHEIME MEN 0.333 0.445 0.148 0.074 1.000 5-Year 7-Yar 10-Year 15-Year 20-Year MACRS MACRS MACRS MACRS MACRS 0.200 0.320 0.192 0.115 0.115 0.058 1.000 0.143 0.245 0.175 0.125 0.089 0.089 0.089 0.045 1.000 0.100 0.180 0.144 0.115 0.092 0.074 0.066 0.066 0.065 0.065 0.033 1.000 0.050 0.095 0.086 0.077 0.069 0.062 0.059 0.059 0.059 0.059 0.059 0.059 0.059 0.059 0.059 0.030 1.000 0.038 0.072 0.067 0.062 0.057 0.053 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.017 1.000
Transcribed Image Text:Table 12-12 Depreciation percentages (expressed in decimals) Depreciation 3-Year Year MACRS 11 2 3 5 6 7 NEMEN MEHREMESELNE 9 आआआआआआ EEEEE 15 E EVENEMEN MEMENER 21 GALERIE 300 SATSARE SE SE SENSE TEPP GEHEIME MEN 0.333 0.445 0.148 0.074 1.000 5-Year 7-Yar 10-Year 15-Year 20-Year MACRS MACRS MACRS MACRS MACRS 0.200 0.320 0.192 0.115 0.115 0.058 1.000 0.143 0.245 0.175 0.125 0.089 0.089 0.089 0.045 1.000 0.100 0.180 0.144 0.115 0.092 0.074 0.066 0.066 0.065 0.065 0.033 1.000 0.050 0.095 0.086 0.077 0.069 0.062 0.059 0.059 0.059 0.059 0.059 0.059 0.059 0.059 0.059 0.030 1.000 0.038 0.072 0.067 0.062 0.057 0.053 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.017 1.000
Table 12-12 Depreciation percentages (expressed in decimals) Depreciation 3-Year Year MACRS 11 2 3 5 6 7 NEMEN MEHREMESELNE 9 आआआआआआ EEEEE 15 E EVENEMEN MEMENER 21 GALERIE 300 SATSARE SE SE SENSE TEPP GEHEIME MEN 0.333 0.445 0.148 0.074 1.000 5-Year 7-Yar 10-Year 15-Year 20-Year MACRS MACRS MACRS MACRS MACRS 0.200 0.320 0.192 0.115 0.115 0.058 1.000 0.143 0.245 0.175 0.125 0.089 0.089 0.089 0.045 1.000 0.100 0.180 0.144 0.115 0.092 0.074 0.066 0.066 0.065 0.065 0.033 1.000 0.050 0.095 0.086 0.077 0.069 0.062 0.059 0.059 0.059 0.059 0.059 0.059 0.059 0.059 0.059 0.030 1.000 0.038 0.072 0.067 0.062 0.057 0.053 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.017 1.000
Transcribed Image Text:Table 12-12 Depreciation percentages (expressed in decimals) Depreciation 3-Year Year MACRS 11 2 3 5 6 7 NEMEN MEHREMESELNE 9 आआआआआआ EEEEE 15 E EVENEMEN MEMENER 21 GALERIE 300 SATSARE SE SE SENSE TEPP GEHEIME MEN 0.333 0.445 0.148 0.074 1.000 5-Year 7-Yar 10-Year 15-Year 20-Year MACRS MACRS MACRS MACRS MACRS 0.200 0.320 0.192 0.115 0.115 0.058 1.000 0.143 0.245 0.175 0.125 0.089 0.089 0.089 0.045 1.000 0.100 0.180 0.144 0.115 0.092 0.074 0.066 0.066 0.065 0.065 0.033 1.000 0.050 0.095 0.086 0.077 0.069 0.062 0.059 0.059 0.059 0.059 0.059 0.059 0.059 0.059 0.059 0.030 1.000 0.038 0.072 0.067 0.062 0.057 0.053 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.045 0.017 1.000
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