When using 100% bonus depreciation and claiming the depreciation deduction in the first quarter (thus moved to Year 0), the after-tax rate of return matches thebefore-tax rate of return (based on federal taxes).O TrueO False

The bonus depreciation is usually used by small and medium enterprises to save tax in the initial…

When using 100% bonus depreciation and claiming the depreciation deduction in the first quarter (thus moved to Year O), the after-tax rate of return matches the before-tax rate of return (based on federal taxes). True O False

When using 100% bonus depreciation and claiming the depreciation deduction in the first quarter (thus moved to Year O), the after-tax rate of return matches the before-tax rate of return (based on federal taxes). True O False

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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A machine has a carrying amount of 100. For tax purposes, depreciation of 30 has already been deducted from taxable profit in prior periods and an amount of 70 will be deductible in future periods, either as depreciation or through a deduction on disposal. Revenue generated by using the machine is taxable, any gain on disposal of the machine will be taxable and any loss on disposal will be deductible for tax purposes. What is the tax base of the machine? a. 100 b. 70 c. 30 d. 0
How did you compute the tax shield? because when I multiply the total dedcution with the rate, it gives me a different answer.
What is the depreciation tax shield if EBIT is $1,500,000, depreciation expense is $200,000, interest expense is $300,000, and the tax rate is 25%? Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit any commas and the $ sign in your response. For example, an answer of $1,000.50 should be entered as 1000.50.
3) ( Below table shows the calculations for an after-tax analysis of a machine purchase alternative. EOY ВТСР Depreciation Deduction Тахable Income АТCF Income Таxes - 20,000 16,000 16,000 16,000 16,000 16,000 18,000 3,000 3,000 3,000 3,000 3,000 3,000 13,000 13,000 13,000 13,000 13,000 15,000 - 6,500 - 6,500 - 6,500 - 6,500 - 6,500 - 7,500 - 20,000 9,500 9,500 9,500 9,500 9,500 1 3 4 6. 10,500 a) Find answers to the below questions What are the cost basis (price) and "annual revenues less expenses"? What is the terminal market value (or salvage value)? What is the income tax rate? i. ii. iii. iv. What is the method used for depreciation deduction? What is the book value at the end of useful life? V. b) Calculate the equivalent present worth (PW) and the equivalent annual worth (AW) at an after-tax MARR of 11%.
Dengar
Fill in the missing numbers for the following income statement. (Do not round intermediate calculations.) Sales Costs Depreciation EBIT Taxes (23%) Net income $ 659,000 420,100 98,900 a. Calculate the OCF. (Do not round intermediate calculations.) b. What is the depreciation tax shield? (Do not round intermediate calculations.) a. OCF $ 206,580 b. Depreciation tax shield
A. Prepare a multistep income statement and determine each of the following subtotals for 20x8 using the information above. Apply a 40% effective tax rate where applicable:
Save & Exit Subm Two independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences: SITUATION Taxable income Amounts at year-end: Future deductible amounts 2. $46,000 $86,000 5,600 10,600 0 5,600 Future taxable amounts Balances at beginning of year, dr (cr): Deferred tax asset, Deferred tax liability $ 1,000 $ 3,180 0 1,000 The enacted tax rate is 30% for both situations. Required: For each situation determine the: SITUATION 2. (a.) Income tax payable currently. (b.) Deferred tax asset - balance at year-end. (c.) Deferred tax asset change dr or (cr) for the year. (d.) Deferred tax liability - balance at year-end. (e.) Deferred tax liability change dr or (cr) for the year. (f.) Income tax expense for the year. Next > 31 of 39
Suppose SAMI company had an additional $4 million depreciation expense in 2023. If SAMI's tax rate on pretax income is 35%, what would be the impact of this expense on SAMF's net income? OA. Decrease by $26 million OB. No change OC. Decrease by $1.4 million OD. Decrease by $4 million CHED
Earnings (loss) Depreciation (assets have a cost of $390,000) CCA Non-deductible expenses Tax rate Taxable income 1. What is the amount of the taxable income or loss in each year? (Negative amounts and deductible amounts should be indicated by a minus sign.) Accounting earnings Permanent difference: Accounting income subject to tax Temporary difference: Taxable income 20X7 20X7 (first year of operations) $99,000 $50,000 $65,000 $19,000 25% 20X8 20X8 $ (168,000) $ 50,000 $ 75,000 $ 19,000 25%
cost and subsequently measured, using either the cost model 7. The resulting revaluation surplus, gross of tax, is P80K. 9. The P80K revaluation gain is recognized in profit or loss. 1. PAS 16 defines depreciation as “the decrease in the value of ar An item of PPE with a carrying amount of P120K is revalued to its 8. All the other items within the class of PPE to which the Disposal costs of P10K were incurred. The loss on the disposal 10. A PPE with a carrying amount of P200K is sold for P180K. 2. According to PAS 16, items of PPE are initially measured at PROBLEM 1: TRUE OR FALSE i PAS 16 defines depreciation as "the decrease in the value 2. According to PAS 16, items of PPE are initially measured cost and subsequently measured, using either the cost modal asset." or the fair value model. 3. An entity acquires an asset for P120K. The asset is estimated to have a useful life of 10 years and a residual value of P20K. The straight line depreciation rate based on depreciable amount is…