Sunland Enterprises purchased a delivery truck on January 1, 2025, at a cost of $28,000. The...
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Sunland Enterprises purchased a delivery truck on January 1, 2025, at a cost of $28,000. The truck has a useful life of 7 years with an estimated salvage value of $5,460. The straight-line method is used for book purposes. For tax purposes, the truck, having an MACRS class life of 7 years, is classified as 5-year property; the optional MACRS tax rate tables are used to compute depreciation. In addition, assume that for 2025 and 2026 the company has revenues of $206,000 and operating expenses (excluding depreciation) of $133,900. Your answer is correct. Prepare income statements for 2025 and 2026. (The final amount reported on the income statement should be income before income taxes.) Prepare income statements for 2025 and 2026. (The final amount reported on the income statement should be income before income taxes.) Revenues Depreciation 2025 206000 3220 Operating Expenses (Excluding Depreciation) 133900 Income before Income Taxes 68880 2026 206000 3220 133900 i 68880 Compute taxable income for 2025 and 2026. Taxable income for 2025 $ Taxable income for 2026 $ Determine the total depreciation to be taken over the useful life of the delivery truck for both book and tax purposes. Book purposes Tax purposes Sunland Enterprises purchased a delivery truck on January 1, 2025, at a cost of $28,000. The truck has a useful life of 7 years with an estimated salvage value of $5,460. The straight-line method is used for book purposes. For tax purposes, the truck, having an MACRS class life of 7 years, is classified as 5-year property; the optional MACRS tax rate tables are used to compute depreciation. In addition, assume that for 2025 and 2026 the company has revenues of $206,000 and operating expenses (excluding depreciation) of $133,900. Your answer is correct. Prepare income statements for 2025 and 2026. (The final amount reported on the income statement should be income before income taxes.) Prepare income statements for 2025 and 2026. (The final amount reported on the income statement should be income before income taxes.) Revenues Depreciation 2025 206000 3220 Operating Expenses (Excluding Depreciation) 133900 Income before Income Taxes 68880 2026 206000 3220 133900 i 68880 Compute taxable income for 2025 and 2026. Taxable income for 2025 $ Taxable income for 2026 $ Determine the total depreciation to be taken over the useful life of the delivery truck for both book and tax purposes. Book purposes Tax purposes
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