The Following Information Was Taken from Buccaneer Corporation's 2011 Income

question 55

Multiple Choice

The following information was taken from Buccaneer Corporation's 2011 income statement:

Buccaneers' first year of operations was 2011. The company has a 30 percent tax rate. Management decided to use accelerated depreciation for tax purpose and the straight-line method of depreciation for financial reporting purposes. The amount charged to depreciation expense in 2011 was $600,000. Assuming no other differences existed between book income and taxable income, what amount did Buccaneer deduct for depreciation on its tax return for 2011?

• A) $480,000
• B) $570,000
• C) $600,000
• D) $720,000

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Definitions:

Simple Linear Regression

A statistical method that shows or predicts the relationship between two continuous variables, using a straight line to describe the linear relationship.

Correlation Coefficient

A statistical measure that calculates the strength and direction of a linear relationship between two quantitative variables.

Residuals

Differences between observed values and the estimated values in a statistical model, reflecting the amount of unexplained variance in the model.

Fitted Values

Estimated values predicted by a regression model, based on the observed data.