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On April 1, 2024, Titan Ca classifies the equipment

On April 1, 2024, Titan Ca classifies the equipment

FINANCIAL ACCOUNTING
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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On April 1, 2024, Titan Corporation purchases office equipment for $54,000. For tax reporting, the company uses MACRS and classifies the equipment as five-year personal property. In 2024, this type of equipment is eligible for 60% first-year bonus depreciation. For financial reporting, the company uses straight-line depreciation. Assume the equipment has no residual value. Required: 1. Calculate annual depreciation for the five-year life of the equipment according to MACRS. The company uses the half-year convention for tax reporting purposes. 2. Calculate annual depreciation for the five-year life of the equipment according to straight-line depreciation. The company uses partial-year depreciation based on the number of months the asset is in service for financial reporting purposes. 3. In which year(s) is tax depreciation greater than financial reporting depreciation? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate annual depreciation for the five-year life of the equipment according to MACRS. The company uses the half-year convention for tax reporting purposes. Note: Round "Depreciation Rate per MACRS" answers to 2 decimal places. Round your final answers to nearest whole dollars. Year 2024 2025 2026 2027 2028 2029 Total Depreciation Basis for MACRS x X x X x X Required 3 X Depreciation Rate per MACRS 20.00% = 32.00% = 19.20 % = 11.52 % = 11.52 % = 5.76 % = 100.00% = MACRS Depreciation S Bonus Depreciation 0 S Prey Total Depreciation 0 S 1 of 1 *** www 0 Next
Transcribed Image Text:On April 1, 2024, Titan Corporation purchases office equipment for $54,000. For tax reporting, the company uses MACRS and classifies the equipment as five-year personal property. In 2024, this type of equipment is eligible for 60% first-year bonus depreciation. For financial reporting, the company uses straight-line depreciation. Assume the equipment has no residual value. Required: 1. Calculate annual depreciation for the five-year life of the equipment according to MACRS. The company uses the half-year convention for tax reporting purposes. 2. Calculate annual depreciation for the five-year life of the equipment according to straight-line depreciation. The company uses partial-year depreciation based on the number of months the asset is in service for financial reporting purposes. 3. In which year(s) is tax depreciation greater than financial reporting depreciation? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate annual depreciation for the five-year life of the equipment according to MACRS. The company uses the half-year convention for tax reporting purposes. Note: Round "Depreciation Rate per MACRS" answers to 2 decimal places. Round your final answers to nearest whole dollars. Year 2024 2025 2026 2027 2028 2029 Total Depreciation Basis for MACRS x X x X x X Required 3 X Depreciation Rate per MACRS 20.00% = 32.00% = 19.20 % = 11.52 % = 11.52 % = 5.76 % = 100.00% = MACRS Depreciation S Bonus Depreciation 0 S Prey Total Depreciation 0 S 1 of 1 *** www 0 Next
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