The Hunter Company purchased a light truck on January 2,2010 for - 15595

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yousafbhutta

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  • Posted on: Sat 09 Mar, 2013
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The Hunter Company purchased a light truck on January 2,2010 for $18,000. The truck, which will be used for deliveries, has the following characteristic: Estimate life: 5 years Estimated residual value: $3,000 Depreciation for financial statements: straight-line Depreciation for income tax purposes: MACRS (three-year-life) From 2010 through 2014, each year, the company had sales of $100,000 cost of goods sold of $60,000, and operating expenses (excluding depreciation) of $15,000. The truck was disposed of on December 31, 2014 for $2,000. Required: 1.Prepare an income statement for financial reporting trough pretax accounting income for each of the five years, 2010 through 2014. 2.Prepare, instead, an income statement for income tax purposes through taxable income for each of the five years, 2010 through 2014. 3.Compare the total income for all five years under Requirement I and Requirement 2.

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