1. On July 1, 2012, Sparky purchased a machine for $200,000 with a salvage value of...

 

Transcribed Image Text:

1. On July 1, 2012, Sparky purchased a machine for $200,000 with a salvage value of $8,000 and useful life of 20 years which was depreciated using the straight line method. On July 1, 2016, Sparky decided to change the salvage to $14,255 and a total useful life of 28 years. The bookkeeper used the old estimates in calculating ICO. Determine the ADJUSTMENT to Sparky's Income from Continuing Operations (ICO) for this item. Sparky has a corporate tax rate of 30%. If you need to increase ICO, enter your answer as a positive number; for instance: 3000 If you need to decrease ICO, enter your answer as a negative number; for instance: -3000 If you determine no change is needed to ICO; enter NE. 1. On July 1, 2012, Sparky purchased a machine for $200,000 with a salvage value of $8,000 and useful life of 20 years which was depreciated using the straight line method. On July 1, 2016, Sparky decided to change the salvage to $14,255 and a total useful life of 28 years. The bookkeeper used the old estimates in calculating ICO. Determine the ADJUSTMENT to Sparky's Income from Continuing Operations (ICO) for this item. Sparky has a corporate tax rate of 30%. If you need to increase ICO, enter your answer as a positive number; for instance: 3000 If you need to decrease ICO, enter your answer as a negative number; for instance: -3000 If you determine no change is needed to ICO; enter NE.

Answer rating: 100% (QA)

Old Estimates Purchase price 200000 Salvage value 8000 Useful life ... View the full answer