Identify a type of company in your pathway that might purchase fixed assets
A company in my pathway that might purchase fixed assets is Bank of America.
List 5 fixed assets that they might purchase to run their business.
1. Furniture (filing cabinets, sofas, desks, chairs etc.)
2. ATM Machines
3. Computer Equipment (routers, servers.)
4. Computer Software (only the most expensive types)
5. Office Equipment (photocopiers, fax machines, postage meter
etc.)
I answered the top two questions, but have to answer the others listed below.
Select one depreciable fixed asset. Based on research suggest what the cost, residual value and estimated life might be for that fixed asset.
Using your assumptions above, calculate:
Straight-line depreciation and book value for each of the first two years
Declining Balance depreciation and book value for each of the first two years
Units of Production depreciation (make assumptions about the first two year’s use), and book value for each of the first two years.
Suggest which depreciation method might be more appropriate and why.
SLM base Depreciation | ||||
Original cost $ | 25,000 | |||
Salvage Value $ | 5,000 | |||
Useful life Year | 5 | |||
Depreciation Expenses | ($25000-$5000)/5 | |||
Depreciation Expenses$ | 4,000 | |||
Period | Books Value $ | Depreciation Expenses $ | Accumulated depreciation$ | Book Value End $ |
1 | 25,000 | 4,000 | 4,000 | 21,000 |
2 | 21,000 | 4,000 | 8,000 | 17,000 |
Double Decline base Depreciation | |||||
Original cost $ | 25,000 | ||||
Salvage Value $ | 5,000 | ||||
Useful life Year | 5 | ||||
Depreciation % | 40% | ( 2/N( number of Year) | |||
Period | Books Value $ | Depreciation Percent | Depreciation Expenses $ | Accumulated depreciation$ | Book Value End $ |
1 | 25,000 | 40% | 10,000 | 10,000 | 15,000 |
2 | 15,000 | 40% | 6,000 | 16,000 | 9,000 |
unit of Production base Depreciation | ||||
Original cost $ | 25,000 | |||
Salvage Value $ | 5,000 | |||
Useful life Year | 5 | |||
Useful life that is expected to end after producing Unit | 10,000 | |||
Depreciation Rate / unit | ||||
($25000-$5000)/10000 Unit | 2 | |||
Number of Unit Produced in Year 1 Unit | 2,000 | |||
Depreciation in Yr 1$ | 4,000 | |||
(2000 Unit *$2/ Unit) | ||||
Number of Unit Produced in Year 2 Unit | 2,500 | |||
Depreciation in Yr 2 $ | ||||
(2500 Unit *$2/ Unit) | 5,000 | |||
Period | Books Value $ | Depreciation Expenses $ | Accumulated depreciation$ | Book Value End $ |
1 | 25,000 | 4,000 | 4,000 | 21,000 |
2 | 21,000 | 5,000 | 9,000 | 16,000 |
The most commonly method for calculating depreciation under generally accepted accounting principle is the “Straight Line Method “
This method is simple and results few error , stays the most consistent and transition well from company prepared statement
Identify a type of company in your pathway that might purchase fixed assets A company in...
Identify a type of company in your pathway that might purchase fixed assets A company in my pathway that might purchase fixed assets is Bank of America. List 5 fixed assets that they might purchase to run their business. 1. Furniture (filing cabinets, sofas, desks, chairs etc.) 2. ATM Machines 3. Computer Equipment (routers, servers.) 4. Computer Software (only the most expensive types) 5. Office Equipment (photocopiers, fax machines, postage meter etc.) I answered the top two questions, but have...
Fixed Asset Discussion: Identify a type of company in your pathway that might purchase fixed assets (see suggestions below). List 5 fixed assets that they might purchase to run their business. Select one depreciable fixed asset. Based on research suggest what the cost, residual value and estimated life might be for that fixed asset. Using your assumptions above, calculate: Straight-line depreciation and book value for each of the first two years Declining Balance depreciation and book value for each of...
Fixed Asset Discussion: Identify a type of company in your pathway that might purchase fixed assets (see suggestions below). List 5 fixed assets that they might purchase to run their business. Select one depreciable fixed asset. Based on research suggest what the cost, residual value and estimated life might be for that fixed asset. Using your assumptions above, calculate: Straight-line depreciation and book value for each of the first two years Declining Balance depreciation and book value for each of...
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