Question

Baugh Travel, whose year-end is December 31, purchased $ 55,500 worth of office furniture on January 7, 2010. The company uses straight-line depreciation for financial statement purposes based on an estimated useful life of five years and a salvage value of $ 500. Baugh’s tax return preparer follows the MACRS rules for income tax purposes.
A. Calculate depreciation expense for financial statement purposes for each year of the asset’s life.
B. Why is it appropriate to use two different methods of depreciation for the same asset?


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  • CreatedMarch 25, 2015
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