A company had thefollowing situation last year Gross sales- 5,890,000 Expenses-

Question

A company had thefollowing situation last year
Gross sales- 5,890,000
Expenses- 2,700,000

They purchased a machine that cost 5,000,000 that they intend todepreciate over 5 years using MACRS what was their before taxincome? a)875,000 b)975015 c)2,190,000 d)1,890,000 A company had thefollowing situation last year
Gross sales- 5,890,000
Expenses- 2,700,000

They purchased a machine that cost 5,000,000 that they intend todepreciate over 5 years using MACRS what was their before taxincome? a)875,000 b)975015 c)2,190,000 d)1,890,000 A company had thefollowing situation last year
Gross sales- 5,890,000
Expenses- 2,700,000

They purchased a machine that cost 5,000,000 that they intend todepreciate over 5 years using MACRS what was their before taxincome?

Explanation / Answer

under half year convention depreciation would be 20% : 20%(5000000)=1000000 :
income before taxes is gross sales-expenses-depr expense :
5890000-2700000-1000000=2190000

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