[The following information applies to the questions displayed below.] Tory Enterprises pays $250,400 for equipment that will last five years and have a $44,800 salvage value. By using the equipment in its operations for five years, the company expects to earn $89,700 annually, after deducting all expenses except depreciation. Prepare a table showing income before depreciation, depreciation expense, and net (pretax) income for each year and for the total five-year period, assuming straight-line depreciation is used.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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[The following information applies to the questions displayed below.]
Tory Enterprises pays $250,400 for equipment that will last five years and have a
$44,800 salvage value. By using the equipment in its operations for five years, the
company expects to earn $89,700 annually, after deducting all expenses except
depreciation.
Prepare a table showing income before depreciation, depreciation expense, and net (pretax)
income for each year and for the total five-year period, assuming straight-line depreciation is used.
Year 1
Year 2
Year 3
Year 4
Year 5
Totals
Answer is complete but not entirely correct.
Income Before Depreciation
Depreciation
Net (Pretax)
Income
Expense
$
89,700
89,700
89,700
89,700
89.700
448,500
$
$
100,160 $
100,096 X
36,058 X
9,286 x
0
245,600 $
(10,460) X
29,604
53,642
80,414
89,700
242,900
Transcribed Image Text:Required information [The following information applies to the questions displayed below.] Tory Enterprises pays $250,400 for equipment that will last five years and have a $44,800 salvage value. By using the equipment in its operations for five years, the company expects to earn $89,700 annually, after deducting all expenses except depreciation. Prepare a table showing income before depreciation, depreciation expense, and net (pretax) income for each year and for the total five-year period, assuming straight-line depreciation is used. Year 1 Year 2 Year 3 Year 4 Year 5 Totals Answer is complete but not entirely correct. Income Before Depreciation Depreciation Net (Pretax) Income Expense $ 89,700 89,700 89,700 89,700 89.700 448,500 $ $ 100,160 $ 100,096 X 36,058 X 9,286 x 0 245,600 $ (10,460) X 29,604 53,642 80,414 89,700 242,900
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