Question

consider the income statement you prepared on page 57 of your textbook if the depreciation expense on equipment is calculated at 25% rather than 30% what is the net income at each stage in your calculation round up to the nearest whole dollar? a) 36,563 b) 37,245 c) 38,245 d) 38,675

Answer 1

Without the complete information from the student's textbook, it is not possible to determine the new net income after changing the depreciation expense rate from 30% to 25%. The process would involve recalculating the depreciation at a reduced rate and then adjusting the net income.

Step-by-step explanation:

The question involves calculating the impact of a change in the depreciation rate on an income statement. To address this, we need to adjust the existing depreciation expense which is directly impacting the net income. Unfortunately, without the complete income statement from page 57 of the textbook, we cannot accurately calculate the new net income. However, the process involves determining the difference in depreciation expense when the rate changes from 30% to 25% and then adjusting the net income accordingly.

If we had the original amount of the depreciation expense calculated at 30%, we would simply recalculate it at 25% and then subtract the lower depreciation expense from the old net income to find the new net income. It's important to note that lowering the depreciation rate will decrease the depreciation expense and thus increase the net income.