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A company had the following situation last year Gross sals- 5,890,000 expenses-

ID: 2770900 • Letter: A

Question

A company had the following situation last year Gross sals- 5,890,000 expenses- 3,500,000 They purchased a machine that cost 5,000,000 that they intendto depreciate over 5 years using straight line. What was theurbefore tax income? a) 875,000 b)975,015 c)1,016,600 d)1,890,000 A company had the following situation last year Gross sals- 5,890,000 expenses- 3,500,000 They purchased a machine that cost 5,000,000 that they intendto depreciate over 5 years using straight line. What was theurbefore tax income? a) 875,000 b)975,015 c)1,016,600 d)1,890,000

Explanation / Answer

income before taxes would be:5000000/5=1000000 straight linedepreciation :
gross sales -expenses-deprexpense=5890000-3500000-1000000=13900000

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