defered taxes
DESCRIPTION
Defered Taxes & Valuation ExampleTRANSCRIPT
Defered TaxesAssetPurchase PriceUseful LifeSalvage ValueMACRS LifeDepreciation BasisTruck:$20,000.010$3,000.04$17,000.0Computer:$5,000.060.03$5,000.0Tax rate:40.0%Book AccountingTax AccountingDepreciation Schedule2014201520162017201820142015201620172018Truck:$1,700.0$1,700.0$1,700.0$1,700.0$1,700.0$6,666.0$8,890.0$2,962.0$1,482.00.0Computer:$833.3$833.3$833.3$833.3$833.3$1,666.5$2,222.5$740.5$370.50.0
Income Statement2014201520162017201820142015201620172018Revenue:$30,000.0$31,200.0$32,448.0$33,745.9$35,095.8$30,000.0$31,200.0$32,448.0$33,745.9$35,095.8COGS:$9,000.0$9,360.0$9,734.4$10,123.8$10,528.7$9,000.0$9,360.0$9,734.4$10,123.8$10,528.7Operating Expenses:$7,500.0$7,800.0$8,112.0$8,436.5$8,773.9$7,500.0$7,800.0$8,112.0$8,436.5$8,773.9Depreciation:$2,533.3$2,533.3$2,533.3$2,533.3$2,533.3$8,332.5$11,112.5$3,702.5$1,852.50.0Pre-Tax Income:$10,966.7$11,506.7$12,068.3$12,652.3$13,259.8$5,167.5$2,927.5$10,899.1$13,333.2$15,793.1Taxes:$4,386.7$4,602.7$4,827.3$5,060.9$5,303.9$2,067.0$1,171.0$4,359.6$5,333.3$6,317.2Net Income:$6,580.0$6,904.0$7,241.0$7,591.4$7,955.9$3,100.5$1,756.5$6,539.5$7,999.9$9,475.9
Effective Tax Rate18.85%10.18%36.12%42.15%47.64%Balance Sheet20142015201620172018Current AssetsCash$14,708.0$27,703.0$38,076.0$48,064.7$57,682.3Inventory$875.0$900.0$936.0$973.4$1,012.4$1,052.9 Total Current Assets$15,608.0$28,639.0$39,049.4$49,077.1$58,735.1Long-Term AssetsPP&E$25,000.0$25,000.0$25,000.0$25,000.0$25,000.0Accumulated Depreciation$2,533.3$5,066.7$7,600.0$10,133.3$12,666.7 Net PP&E$22,466.7$19,933.3$17,400.0$14,866.7$12,333.3Deferred Tax Asset0.00.00.00.00.0 Total Assets$38,074.7$48,572.3$56,449.4$63,943.7$71,068.5Liabilities & EquityCurrent LiabilitiesAccounts Payable$1,750.0$1,800.0$1,872.0$1,946.9$2,024.8$2,105.7Accruals$2,000.0$2,250.0$2,340.0$2,433.6$2,530.9$2,632.2 Total Current Liabilities$4,050.0$4,212.0$4,380.5$4,555.7$4,737.9Long-Term LiabilitiesLong-Term Debt$15,000.0$15,000.0$15,000.0$15,000.0$15,000.0Deferred Tax Liability$2,319.7$5,751.3$6,219.0$5,946.7$4,933.3 Total Liabilities$17,319.7$20,751.3$21,219.0$20,946.7$19,933.3
Shareholder's EquityCommon Stock$100.0$100.0$100.0$100.0$100.0APIC$1,900.0$1,900.0$1,900.0$1,900.0$1,900.0Retained Earnings$8,125.0$14,705.0$21,609.0$28,850.0$36,441.4$44,397.2 Total Shareholder's Equity$16,705.0$23,609.0$30,850.0$38,441.4$46,397.2 Total Liabilities & Equity$38,074.7$48,572.3$56,449.4$63,943.7$71,068.5Balance? Cash Flow Statement20142015201620172018Opearting Cash FlowNet Income:$6,580.0$6,904.0$7,241.0$7,591.4$7,955.9Change Working Capital$275.0$126.0$131.0$136.3$141.7(+) Depreciation$2,533.3$2,533.3$2,533.3$2,533.3$2,533.3 Cash Tax Payment vs Book$2,319.67$3,431.67$467.67($272.33)($1,013.33) Cash flow from opperations$11,708.0$12,995.0$10,373.0$9,988.7$9,617.6Beginning Cash$3,000.0$14,708.0$27,703.0$38,076.0$48,064.7Change in Cash$11,708.0$12,995.0$10,373.0$9,988.7$9,617.6 Ending Cash$14,708.0$27,703.0$38,076.0$48,064.7$57,682.3Tax Schedule20142015201620172018Book Tax Expense$4,386.7$4,602.7$4,827.3$5,060.9$5,303.9Actual Tax$2,067.0$1,171.0$4,359.6$5,333.3$6,317.2 Defered Tax Liability (Asset)$2,319.67$3,431.67$467.67($272.33)($1,013.33)Accumulated Liability (Asset)$2,319.67$5,751.33$6,219.00$5,946.67$4,933.33
MACRS
Recovery Year12345678910111213141516171819202133-Year33.33%44.45%14.81%7.41%55-Year20.00%32.00%19.20%11.52%11.52%5.76%77-Year14.29%24.49%17.49%12.49%8.93%8.92%8.93%4.46%1010-Year10.00%18.00%14.40%11.52%9.22%7.37%6.55%6.55%6.56%6.55%3.28%1515-Year5.00%9.50%8.55%7.70%6.93%6.23%5.90%5.90%5.91%5.90%5.91%5.90%5.91%5.90%5.91%2.95%2020-Year3.75%7.22%6.68%6.18%5.71%5.29%4.89%4.52%4.46%4.46%4.46%4.46%4.46%4.46%4.46%4.46%4.46%4.46%4.46%4.46%2.23%