When Sergei's opened, it had to purchase most of its kitchen equipment. The equipment cost $$40,000$ new plus $$5,000$ to install. If food processing equipment is in the $10$ years MACRS class, what would be the accumulated depreciation after the first three years?
 

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Sergei's Pizza Income Statement Sergei's Pizza Balance Sheet 2016 2016 2016 Sales $ 84,240 Cost of Goods Sold 25,272 Assets Cash $11,500 Liabilities and Equity Accounts Payable $ 2,200 Gross Profit 58,968 Marketable Securities 2,500 Notes Payable SGA Depreciation 26,400 6,750 Inventory Operating Income (EBIT) 25,818 Accounts Receivable Prepaid Expenses 4,213 Accrued Expenses 1,650 -0 2,527 Total Current Liabilities 3,850 3,960 Long-Term Debt 22,500 Interest Expense 3,200 Total Current Assets 24,700 Total Liabilities 26,350 Earnings Before Taxes 22,618 Income Tax Net Income 3,393 Fixed Assets, Gross 45,000 Common Stock ($1 par) 100 $ 19,225 Less Accumulated Depreciation 33,750 Fixed Assets, Net 11,250 Dividends Paid $ 15,000 Change in Retained Earnings $ 4,225 Total Assets $ 35,950 Capital in Excess of Par Retained Earnings Total Common Equity Total Liabilities and Equity -0 9,500 9,600 $ 35,950 Sheet Name Sergei's Financials Background Duplicate Sheet Delete Sheet Sergei's Pizza Income Statement Sergei's Pizza Balance Sheet 2016 2016 2016 Sales $ 84,240 Cost of Goods Sold 25,272 Assets Cash $11,500 Liabilities and Equity Accounts Payable $ 2,200 Gross Profit 58,968 Marketable Securities 2,500 Notes Payable SGA Depreciation 26,400 6,750 Inventory Operating Income (EBIT) 25,818 Accounts Receivable Prepaid Expenses 4,213 Accrued Expenses 1,650 -0 2,527 Total Current Liabilities 3,850 3,960 Long-Term Debt 22,500 Interest Expense 3,200 Total Current Assets 24,700 Total Liabilities 26,350 Earnings Before Taxes 22,618 Income Tax Net Income 3,393 Fixed Assets, Gross 45,000 Common Stock ($1 par) 100 $ 19,225 Less Accumulated Depreciation 33,750 Fixed Assets, Net 11,250 Dividends Paid $ 15,000 Change in Retained Earnings $ 4,225 Total Assets $ 35,950 Capital in Excess of Par Retained Earnings Total Common Equity Total Liabilities and Equity -0 9,500 9,600 $ 35,950 Sheet Name Sergei's Financials Background Duplicate Sheet Delete Sheet

Answer rating: 100% (QA)

Based on the provided information here is a summary of Sergeis Pizza financial statements for 2016 Income Statement Sales 84240 Cost of Goods Sold 252... View the full answer