Exhibit 22-1 on January 1, 2014, the Chrissy Company Purchased

Exhibit 22-1 On January 1, 2014, the Chrissy Company purchased a machine for $450,000 with an estimate useful life of six years and a $30,000 salvage value. Straight-line depreciation was used for financial reporting purposes and MACRS depreciation for income tax reporting. Effective January 1, 2016, Chrissy switched to the double-declining-balance depreciation method for financial statement reporting but not for income tax purposes. Chrissy can justify the change.

-Refer to Exhibit 22-1. Assuming an income tax rate of 35%, depreciation expense related to the equipment reported in Chrissy's 2016 income statement would be

A) $124,000
B) $100,750
C) $140,000
D) $155,000

Correct Answer:

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