J 9*prepare a depreciation schedule for tax purposes showing the depreciation allowance and corresponding book value each year The M&M Company purchased a new railroad track in 2018 at a cost of $ 367,000. M&M also paid $6500 tohave the tracks delivered and installed. A special software installation took 3 laborers 3 days of 8 hours work at$36 per hour. The tracks have an annual maintenance of $12000 per year and a warranty cost of $450 per year.The tracks have an estimated useful life of 9 years. The salvage value of the tracks at the end of useful life of 9years will be $25000. The owner declares 150% declining for the railroad tracks.

There are a few advantages to the double-declining method of depreciation. One advantage is that it…

Answered: prepare a depreciation schedule for tax…

prepare a depreciation schedule for tax purposes showing the depreciation allowance and corresponding book value each 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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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

J 9* prepare a depreciation schedule for tax purposes showing the depreciation allowance and corresponding book value each year

The M&M Company purchased a new railroad track in 2018 at a cost of $ 367,000. M&M also paid $6500 to
have the tracks delivered and installed. A special software installation took 3 laborers 3 days of 8 hours work at
$36 per hour. The tracks have an annual maintenance of $12000 per year and a warranty cost of $450 per year.
The tracks have an estimated useful life of 9 years. The salvage value of the tracks at the end of useful life of 9
years will be $25000. The owner declares 150% declining for the railroad tracks.

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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