Question

ample #1: Dissimilar Exchange (Trade In) Our company purchased a car in 1998 for $28,000. As of today, the accumulated danreciation on this car is $23.500. You traded your old car for a computer system that cost $30,000, and the seller of the computer agreed to: 1) Accept to take your old car (trade in) for $6,000 2) Accept to take your old car (trade in) for $3,500 Example #2: Similar Exchange (Trade In) Your company purchased a car in 1998 for $28.000. As of today, the accumulated depreciation on this car is $23,500. You traded your old car for a newer model. The cost of the new car is $30,000, and the car dealer agreed to: 1) Accept to take your old car (trade in) for $6,000 2) Accept to take your old car (trade in) for $3,500. financial reporting and income tax purposes. Example # 3: Determine and journalize the depreciation for the year of acquisition and for the following two years, of a plan asset acquired on April 12 for $185,000. The cost to ship this equipment was $10,000, and finder fees was $1,000, sales tax S 3,500, and installation was $15.000. The plant asset was ready for production on July 16 but due to lack of materials, the plant asset started the production on August 10. The equipment has an estimated useful life of 6 years, and a residual value of $20,000. Assume a fiscal year ending December 31. Year of Year #2 Year #3 Acquisition a. Declining Balance b. Straight Line c. Sum of the Years Digits

no information provided.

Answer 1

Example: 3

Total cost = $214500

Total Depriciation = 214500-20000= $194500

Annual depriciation = 194500/6 = $32416

Year of aquisition 2nd year 3rd year

Declining balance 198292 165876 133460

Straight line 16208 32416 32416

Sum of the years Digit 1 3 6