Can\'t figure out the last three parts of this questions. The answers in the box

Question

Can't figure out the last three parts of this questions. The answers in the boxes are wrong.

Problem 8-7
Cost of Assets and the Effect on Depreciation

The bookkeeper recorded an asset, Equipment, $165,000 (purchase price and tax). The remaining costs were expensed for the year. Toner used straight-line depreciation. The equipment was expected to last ten years with zero salvage value.

Required:

1. How much depreciation did Toner report on its income statement related to this equipment in Year 1?
$

What is the correct amount of depreciation to report in Year 1?
$

2. Income is $100,000 before costs related to the equipment are reported. How much income will Toner report in Year 1? What amount of income should it report? You can ignore income tax.

Explanation / Answer

1.

How much depreciation did Toner report on its income statement related to this equipment in Year 1

= $165,000/10= $16,500

What is the correct amount of depreciation to report in Year 1?

= ($165,000+4000+25000+3000)/10= 19700

2. Reported income = $100,000 -(4000+25000+3000)= $68000

Income should be reported = 100,000-19700= $80300

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