Bently Poster Company pays income taxes on net income at the rate of 32 percent. The company pays a bonus to its officers of 8 percent of net income after taxes and pays dividends to its shareholders in the amount of 75 percent of net income after taxes. On January 1, 2011, the company purchased a fixed asset for $400,000. Such assets are usually depreciated over a ten-year period. Salvage value is expected to be zero. Assume that the bonus payment is not included as an expense in the calculation of taxable income and reported income.

REQUIRED:

Assume that revenues and expenses (excluding depreciation) for 2011 are $250,000 and $140,000, respectively. Compute the tax, bonus, and dividend payment for 2011 if the company uses the following:

a. The straight-line method of depreciation

b. The double-declining-balance method of depreciation

c. The straight-line method of depreciation, assuming a five-year useful life.