Rapid Recovery Chemical Company manufactures prescription drugs. On January 1, 2003, the company purchased new equipment for $450,000 in cash. The company will depreciate the equipment over a 3 year period at $150,000 each year. Complete the following table:
|
2003 |
2004 |
2005 |
Total for 3 Years |
|
|
Cash paid for equipment |
? |
? |
? |
? |
|
Depreciation expense |
? |
? |
? |
? |
Explain the difference between cash flows each year and the amount of depreciation expense recorded.