789,456 QUESTION 3 Acme Industries had sales last year of 12,000,000 They had ex

Question

789,456 QUESTION 3 Acme Industries had sales last year of 12,000,000 They had expenses of 9,755,000 They purchase several pieces of new equipment during the year that: Cost $3,000,000 to purchase Had $1.100,000 related costs to set up install etc. Has a salvage value of 750,000 in 5 years Using MACRS calculate the Taxable earning(s) 1,190,876 1.300.000 1,425,000 1,789,000 QUESTION 4 Acme Industries had sales last year of 12,000,000 They had expenses of 9,755,000 They purchase several pieces of new equipment during the year that: Cost $3,000,000 to purchase Had $1,100,000 related costs to set up install etc. Has a salvage value of 750,000 in 5 years Using MACRS calculate the amount of tax owed O 375,500 O 400,780 O 425,000 O 484,500

Explanation / Answer

3. Under half year convention for 5 year property, first year depreciation is 20% of the basis of the asset

optionc c: 1425000 is correct

4.

option d 484500 is correct

Particulars Amount Sales 12000000 Less expenses 9755000 EBDT 2245000 Less Depreciation 820000 PBT 1425000 Cost 3000000 Installation 1100000 Basis in asset 4100000 Recovery for first year 20% Depreciation 820000

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