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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 assets life. Instead, it defers or postpones taxes to the later years of an assets 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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This note was uploaded on 08/29/2011 for the course ACCT 106 taught by Professor A during the Spring '11 term at Ohio State.
- Spring '11