A company had sales last year of $3,000,000. They had operating expenses of $1,600,000. They bought a machine that cost $500,000 that has a life of 10 years and a salvage value of $15,000. Based on MACRS what was their Taxable Income?

The answer is $1,350000

Explanation:

Solution

Given that:

Company sales of last year = $3,000,000

Operating expenses = $1,600,000

The purchase of machine = $500,000

Life of machine = 10 years

The salvage value = $15,000

Now,

we find the Taxable income which is given below:

Taxable income = sales - operating expenses - depreciation in year 1

Taxable income = $3,000000 - $1,600000 - 10% * $500,000

Therefore the  atxable income is = $1,350000

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation:

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