Dinkle Company purchased equipment for $50,000. The equipment has an estimated residual value of $5,000 and an expected useful life of 10 years. Dinkle uses straight-line depreciation for its financial statements. Required: What is the difference between the company's income before taxes reported on its financial statements and the taxable income reported on its tax return in each of the first 2 years of the asset's life if the asset was purchased on January 2, 2016, and its MACRS life is 5 years?

Year 1

As per company book deprecation: (Equipment cost-Salvage value)/Life time = (50,000 - 5,000)/10 = 45,000/10 = $4,500

As per income tax depreciation = Cost * MACRS rate for year 1 = 50,000 * 20% = $10,000

Therefore, difference in year 1 will be: $10,000 - $4,500 = $5,500

Year 1

As per company book deprecation: (Equipment cost-Salvage value)/Life time = (50,000 - 5,000)/10 = 45,000/10 = $4,500

As per income tax depreciation = Cost * MACRS rate for year 2 = 50,000 * 32% = $16,000

Therefore, difference in year 1 will be: $16,000 - $4,500 = $11,500

answer: it's a

step-by-step explanation:

answer:

it is general formula that is used to write value to its excet position

a11 a12 a13

a21 a22 a23

it is the example of order 2 by 3 matrix in this

a11 means value occur in 1 st row 1st column

a12 means value occurs in 1st row 2nd column

a13 means value occur in 1st row and 3rd column

a21 means value occurs in 2nd row and 1st column

a22 means value occurs in 2nd row and in 2nd column

a23 means value occurs in 2nd row and in 3rd column