Dear Student,
As per the HOMEWORKLIB POLICY, only the first question should be answered. Kindly take note of it.
Part A
False
Depreciation recapture of an asset is taxed at an ordinary tax rate, while capital gains are taxed at capital gain tax rate.
Part B
False
Two different approaches used to calculated depletion are cost depletion and percentage depletion
Part C
False
In case if residual value is provided, the book value is not zero
Part D
False
Amortization is method of capital expensed over period of time.
EESEEEEEEEEEEEEEEEEE 1) TRUE/False a) The income tax rates are the same for capital gains and depreciation...
caps locK 1) TRUMALSAS a) The income tax rates are the same for capital gains and depreciation recapture of an asset b) Depletion can be calculated in two different approach: Depletion allowance or percentage depletion T/F c) In Straight Line depreciation, the book value is zero at the end of its life. d) Depreciation is method of capital expensed over period of time e) Income tax-rates are same for capltal galns and depreciation recapture of an asset. T/F shift T/F...
2) MCO (show work) 4*5=20 a) An Income producing asset costing $120.000 is being depreciated using the 150% Declining Balance method with a salvage value of $20,000, determine the depreciation in year 2 (2nd year) assuming the equipment will be depreciated over a life of 5 years. A) $37,500 B) $32,500 $17,640 D.) $25,200 b) An income producing asset of $140,000 is being depreciated using the 150% Declining Balance method with a salvage value of $20,000, determine the book value...
Question 1 A business equipment used for the manufacture of commercial goods $40,000. This asset is expected to be sold after 4 years for $7,000. Compute the depreciation amounts every year (depreciation schedule) during the useful life of this asset. Please refer to a current tax regulations1 for CCA rates. Please attempt using the following methods: can be purchased for First, book depreciation: [a] Straight-line (SL) method (Book Depreciation) b] Double balance (DB) method with rate 20% (Book Depreciation) [c]...
1. Answer True or False for the following: a. Taxable Income Gross Income - Expenses - Depreciation charges b. For MACRS depreciation, salvage value varies c. Before tax ROR is higher/more than after tax ROR d. In most cases we want to maximize the depreciation charges taken in the first and second years. e. Payback period analysis may select the wrong alternative f. For straight line depreciation, a constant depreciation charge is made. Fill in the Blanks for the following...
1. Answer True or False for the following: a. Capital expenditures are considered taxable income b. For MACRS depreciation, salvage value varies C. Payback period analysis may select the wrong alternative. d. Taxable Income = Gross Income - Expenses - Depreciation charges In most cases we want to maximize the depreciation charges taken in the first and second years. For straight line depreciation, a constant depreciation charge is made f. Fill in the Blanks for the following questions: A company...
Straight-Line Depreciation Rates Convert each of the following estimates of useful life to a straight-line depreciation rate, stated as a percentage, assuming that the residual value of the fixed asset is to be ignored: (a) 4 years, (b) 8 years, (c) 10 years, (d) 16 years, (e) 25 years, (f) 40 years, (g) 50 years. If required, round your answers to two decimal places. Years Percentage 4 years 8 years 10 years 16 years 25 years 40 years 50 years...
Signify TRUE or FALSE as applicable for each of the following items as they pertain to depreciation. [T/F] a. Accelerated deprecation is better suited for situations where assets become worn based on usage rather than passable of time. b. Accelerated depreciation means that the asset is depreciated in fewer periods than other depreciation methods. c. Units of production is better suited for situations where usage varies from period to period. d. Accelerated depreciation ignores salvage value and allows a business...
TRUE/FALSE? Depreciation may be caused by obsolescence. An asset was sold for $50,000 at the end of its useful life of 7 years. The equipment was bought for $400,000. If it has been depreciated as a 7-year MACRS property, the depreciation recapture on this property is $50,000.
Problem #3 (a) Using straight-line depreciation, what is the book value after 5 years for an asset costing $100,000 that has a salvage value of 20,000 after 10 years? What is the depreciation charge in the 9th year? (b) Using decline-balance depreciation with d=15%, what is the book value after 4 years for an asset costing $250,000? What is the depreciation charge in the 5th year? (c) What is the depreciation rate using declining-balance for an asset costing $250,000 and...
1) A private company in New York bought office furniture and equipment at a cost of $240,000. The total salvage value of these equipment is estimated to be 15% of the initial cost at the end of a depreciable life of 8 years. Determine the book value for this asset at the end of years 4 and 6. Sold after 6 with 70,000. What is the depreciation recapture? a) Straight Line Method