Company ABC bought an equipment for $20,000 in 2015, with useful life of 5 years $5,000...

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Company ABC bought an equipment for $20,000 in 2015, with useful life of 5 years $5,000 residual value amortized using straight-line method. Assume ABC has $3,000 income before taxes for each of the year and 30% tax rate a) Prepare a table to illustrate the differences accounting income vs taxable income caused by this equipment. b) Assume, this equipment was sold at the end of 2017 for $11,000. Please prepare JEs for 2015, 2016 and 2017 Company ABC bought an equipment for $20,000 in 2015, with useful life of 5 years $5,000 residual value amortized using straight-line method. Assume ABC has $3,000 income before taxes for each of the year and 30% tax rate a) Prepare a table to illustrate the differences accounting income vs taxable income caused by this equipment. b) Assume, this equipment was sold at the end of 2017 for $11,000. Please prepare JEs for 2015, 2016 and 2017

Answer rating: 100% (QA)

First we need to calculate the depreciation rate for the equipment with residual value of 5000 and u... View the full answer