Cobalt Homes Limited acquires a new equipment at a cost of $66,000. The estimated salvage value...
Cobalt Homes Limited acquires a new equipment at a cost of $66,000. The estimated salvage value is $6,000 and estimated life of 5 years.
During the first month of the 4th year, the equipment was traded in for a brand-new equipment at $77,000. The trade-in allowance was $7,000. Use CCA rate of 30% to calculate the CCS in the 4th year, and UCC at the end of that year (assume that salvage value equals the trade-in value).
Homework Answers
Ans:-
Let’s first get the CCA schedule using the half-year rule:
| YEAR | CCA | UCC |
| 0 | $66000 | |
| 1 | $9900 | 56100 |
| 2 | 16830 | 39270 |
| 3 | 11781 | 27489 |
| 4 | 8247 | 19242 |
| 5 | 5773 | 13469 |
Salvage value + UCC valueat the end of 5th year
= 6000+ 13469
= 19469
Now, if the salvage value is $6000 then CCS for 4th year is 19469,which is bigger than salvage value.
So, from year 5 and on, you only continue to enjoy tax shields from this amount, which is the remaining book value of the capital cost
Add Answer to:
Cobalt Homes Limited acquires a new equipment at a cost of
$66,000. The estimated salvage value...
On July 2, 2019, Vicuna Inc. purchased equipment for $720,000. This equipment has an estimated useful...
On July 2, 2019, Vicuna Inc. purchased equipment for $720,000. This equipment has an estimated useful life of six years and an estimated residual value of $30,000. Depreciation is taken for the portion of the year the asset is used. The asset is a Class 8 asset with a maximum CCA rate of 20%. Vicuna has a December year end. Instructions a) Complete the schedule below by determining the depreciation expense/CCA and year-end book values/UCC for 2019 and 2020 using...
50. Equipment with a cost of $640,000 has an estimated salvage value of $40,000 and an estimated life of 4 years...
50. Equipment with a cost of $640,000 has an estimated salvage value of $40,000 and an estimated life of 4 years or 15,000 hours. It is to be depreciated using the units-of- activity method. What is the amount of depreciation for the first full year, during which the equipment was used 3,300 hours? A) $160,000. B) $180,800. C) $132,000. (D) $150,000. 48. Using the following data for Stevenson Industries, compute the return on assets. Net Income $ 180,000 Total Assets...
1. Equipment with a cost of $165,850.00 has an estimated residual value of $9,461.00 and an...
1. Equipment with a cost of $165,850.00 has an estimated residual value of $9,461.00 and an estimated life of 3 years or 15,058 hours. It is to be depreciated by the straight-line method. What is the amount of depreciation for the first full year, during which the equipment was used 3,118 hours? Select the correct answer. A.$3.00 B.$32,382.85 C.$50.16 D.$52,129.67 2. A fixed asset with a cost of $23,712 and accumulated depreciation of $21,341 is traded for a similar asset...
Equipment with a cost of $456000 has an estimated salvage value of $36000 and an estimated...
Equipment with a cost of $456000 has an estimated salvage value of $36000 and an estimated life of 4 years or 10000 hours. It is to be depreciated by the units-of-activity method. What is the amount of depreciation for the first full year, during which the equipment was used for 2200 hours? $92400. $114000. $110250. $105000.
Equipment with a cost of $400,000 has an estimated salvage value of $25,000 and an estimated...
Equipment with a cost of $400,000 has an estimated salvage value of $25,000 and an estimated life of 4 years or 15,000 hours. It is to be depreciated using the units-of-activity method. What is the amount of depreciation for the first full year, during which the equipment was used 3,300 hours? $100,000 $113,800 $82,500 $93,750
*204. A company purchased office equipment for $30,000 and estimated a salvage value of $6,000 at...
*204. A company purchased office equipment for $30,000 and estimated a salvage value of $6,000 at the end of its 8-year useful life. The constant percentage to be applied against book value each year if the double-declining-balance method is used is a. 8%. b. 12.5% c. 25.0%. d. 2.5%
*204. A company purchased office equipment for $30,000 and estimated a salvage value of $6,000 at...
*204. A company purchased office equipment for $30,000 and estimated a salvage value of $6,000 at the end of its 8-year useful life. The constant percentage to be applied against book value each year if the double-declining-balance method is used is a. 8%. b. 12.5% c. 25.0%. d. 2.5%
PART Ill INPUT Cost of Equipment Estimated Salvage Value Estimated Life (Yrs) Year of Testing Net...
help please
PART Ill INPUT Cost of Equipment Estimated Salvage Value Estimated Life (Yrs) Year of Testing Net Future Cash Flows at 12/31 in year of Testing Fair Value at 12/31 in year of Testing 760,000 00,000 20 2025 500,000 490,000 OUTPUT: SL Method RIGINAL Calculations Depreciable Base Depreciation Expense in first year Years Depreciated AD at 12/31 used for Testing Impairment Testing. this year BV at 12/31 used for Testing Testing Item Impaired? (Yes or No) Impairment Loss A/D...
Cullumber Company purchased a new machine on October 1, 2022, at a cost of $66,000. The...
Cullumber Company purchased a new machine on October 1, 2022, at a
cost of $66,000. The company estimated that the machine has a
salvage value of $7,140. The machine is expected to be used for
72,000 working hours during its 6-year life.
Compute the depreciation expense under the straight-line method for
2022 and 2023, assuming a December 31 year-end. (Round
answers to 2 decimal places, e.g. 5,275.25.)
Exercise 9-05 Cullumber Company purchased a new machine on October 1, 2022, at...
Company A purchased equipment. The cost for the equipment is 500,000. Estimated salvage value after 5...
Company A purchased equipment. The cost for the equipment is 500,000. Estimated salvage value after 5 years is 50,000. 1. Determine the depreciation for year 3 using DDB, 150% DB and SL methods. 2. For DDB and 150% DB methods, determine the implied salvage after 5 years. 3. Calculate the depreciation rate d for each year for the DDB method. 4. Plot the book value of DDB and SL depreciation.
50. Equipment with a cost of $640,000 has an estimated salvage value of $40,000 and an estimated life of 4 years or 15,000 hours. It is to be depreciated using the units-of- activity method. What is the amount of depreciation for the first full year, during which the equipment was used 3,300 hours? A) $160,000. B) $180,800. C) $132,000. (D) $150,000. 48. Using the following data for Stevenson Industries, compute the return on assets. Net Income $ 180,000 Total Assets...
Equipment with a cost of $456000 has an estimated salvage value of $36000 and an estimated life of 4 years or 10000 hours. It is to be depreciated by the units-of-activity method. What is the amount of depreciation for the first full year, during which the equipment was used for 2200 hours? $92400. $114000. $110250. $105000.
*204. A company purchased office equipment for $30,000 and estimated a salvage value of $6,000 at the end of its 8-year useful life. The constant percentage to be applied against book value each year if the double-declining-balance method is used is a. 8%. b. 12.5% c. 25.0%. d. 2.5%
*204. A company purchased office equipment for $30,000 and estimated a salvage value of $6,000 at the end of its 8-year useful life. The constant percentage to be applied against book value each year if the double-declining-balance method is used is a. 8%. b. 12.5% c. 25.0%. d. 2.5%
help please
PART Ill INPUT Cost of Equipment Estimated Salvage Value Estimated Life (Yrs) Year of Testing Net Future Cash Flows at 12/31 in year of Testing Fair Value at 12/31 in year of Testing 760,000 00,000 20 2025 500,000 490,000 OUTPUT: SL Method RIGINAL Calculations Depreciable Base Depreciation Expense in first year Years Depreciated AD at 12/31 used for Testing Impairment Testing. this year BV at 12/31 used for Testing Testing Item Impaired? (Yes or No) Impairment Loss A/D...
Cullumber Company purchased a new machine on October 1, 2022, at a
cost of $66,000. The company estimated that the machine has a
salvage value of $7,140. The machine is expected to be used for
72,000 working hours during its 6-year life.
Compute the depreciation expense under the straight-line method for
2022 and 2023, assuming a December 31 year-end. (Round
answers to 2 decimal places, e.g. 5,275.25.)
Exercise 9-05 Cullumber Company purchased a new machine on October 1, 2022, at...
Most questions answered within 3 hours.
-
please don't use the p value method instead use the "5 steps of
hypothesis testing." Or...
asked 1 minute ago -
It is said that Galileo discovered a basic principle of the
pendulum—that the period is independent...
asked 6 minutes ago -
The Cost of Equity and
Flotation Costs
Messman Manufacturing
will issue common stock to the public...
asked 13 minutes ago -
a) summarize the challenges facing New Britain today
b) identify some of its strengths
c) suggest...
asked 15 minutes ago -
**86 at 40 not 88. please show how got Tr in calculations thank
you
2) The...
asked 16 minutes ago -
McGlaun Company pays its employees every two weeks. The firm
last paid its employees on September...
asked 29 minutes ago -
You have been gifted a Mogwai as a pet and decide to do a little
online...
asked 34 minutes ago -
given the standard of 200 mg/dl and the absorbance of that
standard is 0.640. What is...
asked 37 minutes ago -
Exercise 8-51 Algo
An accounting professor is notorious for being stingy in giving
out good letter...
asked 45 minutes ago -
month
total distribution cost
level of activity (unit produced)
july
230.000
3500
august
250.000
3750
september...
asked 46 minutes ago -
A smoke detector system uses two devices, A and B. If smoke is
present, the probability...
asked 1 hour ago -
Your division head has assigned another important project to you
and your team. This project is...
asked 59 minutes ago