Griffith delivery service purchased a delivery truck for

Assignment Help Accounting Basics

Reference no: EM13591012

Griffith Delivery Service purchased a delivery truck for $33,600. The truck has an estimated useful life of six years and no salvage value. For purposes of preparing financial statements, Griffith is planning to use straight-line depreciation. For tax purposes, Griffith follows MACRS. Depreciation expense using MACRS is $6,720 in Year 1, $10,750 in Year 2, $6,450 in Year 3, $3,870 in each of Years 4 and 5, and $1,940 in Year 6.

Required

1. What is the difference between straight-line and MACRS depreciation expense for each of the six years?

2. Griffith's president has asked why you use one method for the books and another for tax calculations. ‘‘Can you do this? Is it legal? Don't we take the same total depreciation either way?'' he asked. Write a brief memo answering his questions and explaining the benefits of using two methods for depreciation.

Reference no: EM13591012

Questions Cloud

Name the four basic financial statements and discuss the : 1. name the four basic financial statements and discuss the information that is presented on each statement.2. explain

The ladder is 9 ft from the side of the building if the : 1 a 15 ft ladder is placed against the side of the building. the ladder is 9 ft from the side of the building. if the

A local credit card company receives a constant flow of : a local credit card company receives a constant flow of cash from its customers. the checks are deposited continuously

You have decided to start an engineering design firm and : you have decided to start an engineering design firm and have borrowed 1 million at 5.25 compounded quarterly. this

Griffith delivery service purchased a delivery truck for : griffith delivery service purchased a delivery truck for 33600. the truck has an estimated useful life of six years and

Hart corporation had year-end assets of 1200000 sales of : heart corporation had year-end assets of 1200000 sales of 1650000 net income of 140000 net cash flows from operating

You are the senior accountant responsible for recording : you are the senior accountant responsible for recording accrued liabilities at the end of the companys fiscal year.

At december 31 2009 the general ledger of main street : at december 31 2009 the general ledger of main street marketing had the following account balances. all adjusting

What is the environment of financial reporting in the : what is the environment of financial reporting in the united states? who are the major parties involved in making

User Account

All Pages