Using the straight-line method, how much depreciation occurs in year 1? b) Using the double-declining method, how much depreciation occurs in year 1?
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The XYZ Corporation is investing in a $100,000 piece of machinery with 5-year useful life and $20,000 residual value.
a) Using the straight-line method, how much
b) Using the double-declining method, how much depreciation occurs in year 1?
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- A new machine tool is being purchased for $260,000 and is expected to have a $36,000 salvage value at the end of its 5-year useful life. Assume any remaining depreciation is claimed in the last year. Compute the depreciation schedules for this capital asset, using the following methods: (a) Straight-line depreciation (b) MACRS Note: No statement is required for this problem.Given a cost of a depreciable fixed asset of $24,000 with a salvage value of $2,000 and a life of 5 years, what is the annual depreciation of the fixed asset using the straight-line method? What would be the depreciation in the second year if it used the declining balance method at double the straight-line rate? In regards to question #1, if the company used the straight-line method and sold the asset after 4 years for $7,000, what would be the journal entry needed to record the transaction? What if they sold it for $5,000?A depreciable asset has a cost of P120,000, estimated useful life of 8 years, and an estimated residual value of P20,000.1. What is the depreciation rate if you are using the straight line method?2. What is the depreciation rate if you are using 150% declining balance method?3. What is the depreciation rate if you are using double declining balance method?Note: For nos. 1 to 3, the rate must be rounded off to two decimal places. Ex: 10.00%, 12.30%, 15.55%4. What is the depreciation rate if you are using the declining balance method?Note: For no. 4, the rate must be rounded off to 6 decimal places. Ex: 10.123456%5. Using SYD method, what is the depreciation expense for the 1st year?6. Using SYD method, what is the carrying amount at the end of the 6th year?7. Using double declining balance method, what is the carrying amount at the end of the 3rd year? Subparts 4-5 only
- A depreciable asset has a cost of P120,000, estimated useful life of 8 years, and an estimated residual value of P20,000.1. What is the depreciation rate if you are using the straight line method?2. What is the depreciation rate if you are using 150% declining balance method?3. What is the depreciation rate if you are using double declining balance method?Note: For nos. 1 to 3, the rate must be rounded off to two decimal places. Ex: 10.00%, 12.30%, 15.55%4. What is the depreciation rate if you are using the declining balance method?Note: For no. 4, the rate must be rounded off to 6 decimal places. Ex: 10.123456%5. Using SYD method, what is the depreciation expense for the 1st year?6. Using SYD method, what is the carrying amount at the end of the 6th year?7. Using double declining balance method, what is the carrying amount at the end of the 3rd year?3azelly, a moving company, has purchased a large new trucktractor for over-the-road use. It has, with additional options, a cost basis for depreciation purposes of $198000. Its MV at the end of 4 years is estimated to be $38900. What is the BV at the end of year two using straight line depreciation method? What is the declining balance rate? d = What is the cumulative depreciation through the end of year three assuming it will be depreciated under the GDS?Redtail Hawk Company is evaluating two possible investments in depreciable plant assets. The company uses the straight−line method of depreciation. The following information is available: Investment A Investment B Initial capital investment $17,500 $455,000 Estimated useful life 8 years 8 years Estimated residual value $8,000 $15,000 Estimated annual net cash inflow $7,000 $70,000 Required rate of return 11% 12% How long is the payback period for Investment A?
- Use the following information for the Exercises below. (Algo) Skip to question [The following information applies to the questions displayed below.] Tory Enterprises pays $242,400 for equipment that will last five years and have a $44,000 salvage value. By using the equipment in its operations for five years, the company expects to earn $88,900 annually, after deducting all expenses except depreciation. Exercise 10-9 (Algo) Straight-line depreciation and income effects LO P1 Prepare a table showing income before depreciation, depreciation expense, and net (pretax) income for each year and for the total five-year period, assuming straight-line depreciation is used. Income before Depreciaton Depreciation Net( pretax) Income Year 1 year 2 year 3 year 4 year 5 Totalsa petroleum company has purchased an air cooler for offshore use (asset class 13.2). It has a cost basis of $400,000. With additional options costing $20,000, the cost basis for depreciation purposes is $420,000. Its MV at the end of five years is estimated as $80,000. Assume it will be depreciated under the GDS: a) what is the cumulative depreciation through the end of year three? b) What is the MACRS depreciation in the fourth year? c) What is the BV at the end of year twoIn Year 1, Manny Company purchased a piece of equipment with a cost of 76000 and a useful life of 5 years. At the beginning of Year 3, the company has determined the following: Expected future cash flows $42000 PV of expected future cash flows $37000 Net selling price $38000 Assuming the company used straight-line depreciation and the residual value is 0, what is the depreciation in Years 1 and 2 for US GAAP and IFRS? What is the net carrying amount at the beginning of Year 3 for US GAAP and IFRS? What is the impairment, if any, for US GAAP and IFRS as of the beginning of Year 3?
- Dragonfly, Inc. is evaluating two possible investments in depreciable plant assets. The company uses the straight-line method of depreciation. The following information is available: Investment A Investment B $101,000 Initial capital investment Estimated useful life $151,000 10 years 10 years Estimated residual value $20.000 $47.000 12% Estimated annual net cash inflow for 10 years $28.000 Required rate of return 12% Calculate the payback period for Investment A. (Round your answer to two decimal places.) O A. 1.00 year О В. 3.61 years O C. 2.22 years O D. 2.89 yearsA company purchased a valuable capital asset three years ago for $8.2 million and it currently has a book value of $6.2 million. The asset is now being sold for $11.6 million. (a) What is the amount of the depreciation recapture, ordinary losses, and capital gain associated with the sale of the asset? Depreciation Recapture: $ Blank 1. Calculate the answer by read surrounding text. million Ordinary Losses: $ Blank 2. Calculate the answer by read surrounding text. million Capital Gain: $ Blank 3. Calculate the answer by read surrounding text. million (b) Assuming that the company is subject to a federal income tax rate of 21%, a state income tax rate of 5.6% and a federal capital gains tax rate of 15%, what is the combined state plus federal tax rate and how much will the company owe in taxes as the result of this sale? Combined State & Federal Tax Rate: Blank 4. Calculate the answer by read surrounding text. % Taxes Owed: $ Blank 5. Calculate the answer by read surrounding text.…3. Your company has purchased a large new truck-tractor for over-the-road use for $220,000. It's estimated salvage value at the end of a 10 year life is $10,000. a) If straight-line depreciation is used, what would be the depreciation deduction in year 2? b) If 200% declining balance depreciation is used (R = 2/10), what would be the depreciation deduction in year 2? c) If MACRS depreciation is used with a GDS recovery period of 5 years, what would be the book value of the asset after two years of depreciation? For a 5-year asset, ri = 0.2, r2 -0.32, ry= 0.192, ra = 0.1152, rs 0.1152, ro - 0.0576