Tory Enterprises pays $247,400 for equipment that will last five years and have a $44,500 salvage value. By using the equipment in its operations for five years, the company expects to earn $89,400 annually, after deducting all expenses except depreciation.

Tory Enterprises pays $247,400 for equipment that will last five years and have a $44,500 salvage value. By using the equipment in its operations for five years, the company expects to earn $89,400 annually, after deducting all expenses except depreciation.


Prepare a table showing income before depreciation, depreciation expense, and net (pretax) income for each year and for the total five-year period, assuming straight-line depreciation.

 
Explanation
Depreciation expense = ($247,400 – $44,500) / 5 years = $40,580
Thank you!