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Unformatted text preview: = $29,620 Part 3 Year 2009 double-declining-balance depreciation on land improvements (100% / 5 years) x 2 = 40% rate $37,200 x 40% = $14,880 Part 4 Accelerated depreciation does not increase the total amount of taxes paid over the asset’s life. Instead, it defers or postpones taxes to the later years of an asset’s useful life. This is because accelerated methods charge a higher portion of asset costs against revenue in earlier years and a lower portion in later years. The result is to reduce taxable income more in earlier years and less in later years. [Note: From a present value perspective, there is a tax savings from use of accelerated depreciation. The company gets to use the deferred tax amounts for investment purposes until they are due.]...
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- Spring '11
- Taxation in the United States, ........., Generally Accepted Accounting Principles