A firm purchased $35,000 in office furniture this year. The firm has $150,000 in earnings before depreciation and taxes each year, and the tax obligation is $55,000 each year. a) According to the lecture, what MACRS schedule should be used? b) Using the half-year convention, over how many years will the furniture be depreciated? c) What is the difference between the accounting flows and the cash flows for the first year? d) What is the difference between the accounting flows and the cash flows for the second year?

A firm purchased $35,000 in office furniture this year. The firm has $150,000 in earnings before depreciation and taxes each year, and the tax obligation is $55,000 each year. a) According to the lecture, what MACRS schedule should be used? b) Using the half-year convention, over how many years will the furniture be depreciated? c) What is the difference between the accounting flows and the cash flows for the first year? d) What is the difference between the accounting flows and the cash flows for the second year?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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