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A company that earns $8,000 per year has an asset that can be declined by the...
A company that earns $8,000 per year has an asset that can be declined by the DDB method. The initial cost of the asset is $10,000; and its salvage value is $1,500 after 4 years. Note that the book value of the asset at year 4 must meet its salvage value. If MARR is 10% per year. Find the taxable income in years 1-4. Straight Line Depreciation: ds-1/n BV B(1-dpa) i-10% 11.100 0909 1.000 0.000 2 1210 1.736 2.100 0.826...
Sheffield Company acquired a plant asset at the beginning of Year 1. The asset has an estimated service life of 5 years. An employee has prepared depreciation schedules for this asset using three different methods to compare the results of using one method with the results of using other methods. You are to assume that the following schedules have been correctly prepared for this asset using (1) the straight-line method, (2) the sum-of-the-years'-digits method, and (3) the double-declining-balance method. Year...
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]...
If an asset book-depreciates by the DDB method over an 8-year period, how long will it take to reach its salvage value if the estimated salvage is 25% of the first cost? (10 points)
2) A project utilizing CNCs provides a revenue (income) of $20,000 increasing at $5,000 per year during a four (4)-year investment period. The machine to be used on the project is purchased for $20,000 and has an expected life of 4 years. he salvage value at the end of 4 years is $4,000. Out-of-pocket expenses are $10,000 for the first year and increases arithmetically at $1,000/yr thereafter, and depreciation deduction for income tax purposes are taken using a Years Digit...
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.
Determine the FW of the following engineering project when the MARR is 15% per year. Is the project acceptable? Project Investment Cost $10,000 Expected life 5 years Market (Salvage) Value* -$1,000 Annual Receipts $8,000 Annual Expenses $4,000 * A negative market value means that there is a cost to dispose of an asset.
11 - MACRS and Salvage Tax Problem (C) A company has taxable income from other sources of $58,000 per year. It is considering the purchase of a front-end loader truck that costs $70,000 and The company has an incremental state income tax rate of 8%. when the truck is sold. What is this taxable gain called? has an estimated salvage value of $10,000 at the end of 5 years useful life. A) Compute the MACRS depreciation schedule and any taxable...
QUESTION 6 A manufacturing company has purchased three assets: Item Lathe Truck Building Initial cost $43,000 $25,000 $900,000 Book life 12 years 200,000 miles 50 years MACRS class 7 years 5 years 39 years Salvage value $3,000 $2,000 $100,000 Book depreciation DDB Unit production (UP) SL The truck was depreciated by the units-of-production method. Usage of the truck was 22,000 miles, 30,000 and 45,000 miles during the first three years, respectively. Calculate the depreciation stated for each asset...
QUESTION 6 A manufacturing company has purchased three assets: Item Lathe Truck Building Initial cost $43,000 $25,000 $900,000 Book life 12 years 200,000 miles 50 years MACRS class 7 years 5 years 39 years Salvage value $3,000 $2,000 $100,000 Book depreciation DDB Unit production (UP) SL The truck was depreciated by the units-of-production method. Usage of the truck was 22,000 miles, 30,000 and 45,000 miles during the first three years, respectively. Calculate the depreciation stated for each asset...