12.19 Exactly 10 years ago, Boyditch Professional Asso- ciates purchased $100,000 in depreciable assets with an estimated salvage of $10,000. For tax de- preciation the SL method with n = 10 years was used, but for book depreciation, Boyditch applied the DDB method with n = 7 years and neglected the salvage estimate. The company sold the assets today for $12,500. a. Compare this sales amount with the book val- ues using SL and DDB methods. b. If a salvage of $12,500 had been estimated ex- actly 10 years ago, determine the depreciation for each method in year 10.

12.19 Exactly 10 years ago, Boyditch Professional Asso- ciates purchased $100,000 in depreciable assets with an estimated salvage of $10,000. For tax de- preciation the SL method with n = 10 years was used, but for book depreciation, Boyditch applied the DDB method with n = 7 years and neglected the salvage estimate. The company sold the assets today for $12,500. a. Compare this sales amount with the book val- ues using SL and DDB methods. b. If a salvage of $12,500 had been estimated ex- actly 10 years ago, determine the depreciation for each method in year 10.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Original Cost POST. ... Accumulated Depreciation for Previous Years DATE DESCRIPTION REF. DEBIT CREDIT ... Book Value, Beginning Year 4 1 20xx ... Revised Salvage Value 2 2. ... Revised Remaining Depreciation Cost 3 ... 4 Revised Useful Life 3 Years Revised Depreciation, Total Revised Depreciation, Per Year ...
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