need solution for this questions An asset was acquired by Hugo and Sons for afirst cost of $100,000 via a 10% per year loanthat needs to be paid back using equal uniformamounts at the end of each year in 2 years. Inthe first year, the company claimed $60,000depreciation. If the gross income is $200,000and operating expenses are $50,000, what isthe taxable income?

Step 1: Definition of Taxable IncomeTaxable income refers to the portion of a business's income…

Answered: An asset was acquired by Hugo and Sons…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 8PA: Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the...

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An asset was acquired by Hugo and Sons for a first cost of $100,000 via a 10% per year loan that needs to be paid back using equal uniform amounts at the end of each year in 2 years. In the first year, the company claimed $60,000 depreciation. If the gross income is $200,000 and operating expenses are $50,000, what is the taxable income? Subject - general account question.
Southern inc. purchases an asset for 98,000. Thus asset qualifies as a 3 year recovery asset under MACRS with the fixed depreciation percentages as follows: year 1= 33.33% year 2: 44.45% year 3= 14.81% and year 4 = 7.41%. Southern has a tax date of 25%. If the asset is sold at the end of 2 years for 29,000 what is the cash flow disposal ? 17,404 11,129 13,923 21,755 27,194
Churchill Ltd. purchases an asset for $150,000. This asset qualifies as a five-year recovery asset under MACRS with the fixed depreciation percentages as follows: year 1 = 20.00%; year 2 = 32.00%; year 3 = 19.20%; year 4 = 11.52%. Churchill has a tax rate of 30%. If the asset is sold at the end of four years for $40,000, what is the cash flow from disposal?
Northern Inc. purchases an asset for $150,000. This asset qualifies as a five−year recovery asset under MACRS with the fixed depreciation percentages as follows: year 1 = 20.00%; year 2 = 32.00%; year 3 = 19.20%; year 4 = 11.52%. The firm has a tax rate of 20%. If the asset is sold at the end of four years for $40,000, what is the cash flow from disposal?
Assume the following: . A firm acquires an asset for $120.000 with a 5 year useful life and no salvage . The asset will generate $50,000 of cash flow for all five years . The tax rate is 20% . The firm will depreciate the asset over four years on a straight-line (SL) basis for tax purposes and over five years on a SL basis for financial reporting purposes. Taxable income in year 1 is: $26.000 $20.000 © $4.000
An asset was purchased for $180,000. The CCA rate for this asset was 25%. The effective tax rate was 40%. Assume books are closed and any tax credit for capital loss can be claimed immediately. Find the disposal tax effect for the asset if sold after 5 years for the following prices: a] $130,000 b] $35,000 c] $12,000
A property that produces a level of NOI of $200,000 per year is expected to be sold in year 5 for $2,000,000. If the property was purchased for $2,000,000, what percent of the IRR can be attributed to the operating income only?
A corporation acquires specialized machinery for $200,000 with a useful life of 9 years. The machinery has an annual benefit of $40,000 and a salvage value of $20,000. Calculate the before-tax cash flow, annual depreciation expense, taxable income, yearly taxes, and after-tax cash flow, considering a 30 % bonus depreciation for the first year and straight-line after that and a state income tax rate of 9%. 5. A corporation acquires specialized machinery for $200,000 with a useful life of 9 years. The machinery has an annual benefit of $40,000 and a salvage value of $20,000. Calculate the before-tax cash flow, annual depreciation expense, taxable income, yearly taxes, and after-tax cash flow, considering a 30 % bonus depreciation for the first year and straight-line after that and a state income tax rate of 9%.
Short Company purchased land by paying $11,000 cash on the purchase date and agreed to pay $11,000 for each of the next six years beginning one-year from the purchase date. Short's incremental borrowing rate is 7%. The land reported on the balance sheet is closest to: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided.) Multiple Cholce $77,000. $63.432. $66,000. $43,979.
ABC Corporation acquired an asset for a purchase price of P1,200,000. This is expected to appreciate every yearby 5%. The entity will be incurring P50,000 cost to dispose the asset by the end of its 20-year investment period. If the cost to finance this investment is 4%, what is the intrinsic value of the asset after accounting for the cost of illiquidity? a. P1,583,626.69 b. P1,430,297.18 c. P8838,969.98 d. P972,129.05 e. None among the other choices
A company purchases an asset that costs $30,000. This asset qualifies as 3-year property under MACRS The company uses an after-tax discount rate of 13% and faces a 40% income tax rate, (a) Use the appropriate present value factors found in Appendix C. Table 1, to determine the present value of the depreciation deductions for this firm over the specified four-year period. Refer to Exhibit.12.4. (Round depreciation expense to 2 decimal places.) Depreciation Deduction Tax Present Values Sipped Vear Savings 21 3. 4
A company purchases an asset at a cost $200,000 and depreciates as a MACRS 5- year property. The Market value of the asset the end of year 6 is $40,000. the company's incremental income-tax rate is 35%. The company's cash flows for the asset are as shown. 1 2 3 4 5 6 Year Initial Cost Revenue O&M Expenses Salvage 0 $200K $60K $65K $15K $15K $65K $20K $70K $20K a) The first-year after tax-cash flow is b) The fourth -year taxable income is equal to c) The tax on depreciation recapture in year 6 is equal to $70K $25K $65K $25K $40K

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