In depreciation analysis, the method that will yield the highest book value at the end of n years is always the top factor to consider.
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TRUE OR FALSE:
- In depreciation analysis, the method that will yield the highest book value at the end of n years is always the top factor to consider.
- Replacement ends depreciation.
- If a property’s market value becomes 0, the owner has no right to sell it at a value > 0 since this will be taxable at a very large rate.
- Any net income obtained from selling a
depreciated property according to its last market value is considered acapital gain .
Step by step
Solved in 4 steps
- 9. If a property's market value becomes 0, the owner has no right to sell it at a value > 0 since this will be taxable at a very large rate. 10. Any net income obtained from selling a depreciated property according to its last market value is considered a capital gain.If an item is capitalized why do you think different depreciation methods are allowed? Does the depreciation method chosen impact Net Income in the short term? What about over the life of the asset? Assume you have an asset with original cost of $150,000 and accumulated depreciation of $30,000 when you spend $10,000 on the asset. If the $10,000 is an ordinary repair what is the Book Value Before and the Book Value after the $10,000 expenditure? If the $10.000 expenditure is an Extraordinary Repair (extends the life of the asset) and is recorded as a debit to Accumulated Depreciation and a credit to Cash What is the Book Value Before and the Book Value after the $10,000 expenditure? if the expenditure is a Betterment (improves the function of the asset) and is recorded as a debit to the asset and a credit to Cash. What is the Book Value Before and the Book Value after the $10,000 expenditure?Which method will produce the highest charge to income in year 4? Which method will produce the highest book value for the asset at the end of year 3? If the asset is sold at the end of year 3, which method would yield the highest gain (or lowest loss) on disposal of the asset?
- What is the double declining balance depreciation calculation? O Long-term assets that lack physical substance, and whose existence is often based on a legal contract. O An accelerated method that allocates a higher amount of depreciation expense in the earlier years of the asset's life and lower depreciation in later years O Allocating an equal amount of depreciation expense to each year of the assets service life. O The amount the company expects to receive from selling the assets at the end of its service life. ASUS f4 f5 E3 f6 f7 f8 f9 f10 f11 & 4 7 9. Y U 61 18 t6 5 LLWith regards to depreciation, which of the following is not true? O Straight Line depreciation includes initial cost and salvage value in the depreciation calculation. In straight line depreciation, the depreciation life (n) is set based on the MACRS property class. MACRS Depreciation method is the only method allowed for accounting and tax purposes. In MACRS depreciation, the salvage value is assumed to be zero. In straight line depreciation, the asset is depreciated down to a book value equal to the salvage value.Which of the following statements regarding the acquisition of PP&E is false? A. For a self constructed asset, capitalized interest can exceed actual interest cost. B. If a long-lived asset is acquired and will be paid over a number of years, the time value of money should be considered. C. The general rule of PP&E valuation is to value the asset received at the fair market value of what was given up. D. The acquisition cost of land should include all things that prepared it for it's use including excavation. In interest capitalization related to self constructed assets, all of the following must occur before the capitalization window begins except: A. Expenditures for the assets have been incurred B. Depreciation of the asset being built has been recognized C. Activities that are necessary to get the asset ready for its intended use are in progress D.Interest has to be incurred
- (d) If the old machine is sold for $5,000 now instead of $2,500, what would be the amount of the gains tax?(e) If the old machine had been depreciated by 175% DB and then by a switch to SL depreciation, what would be the current book value?(f) If the old machine were not replaced by the new one and has been depreciated by the 175% DB method, when would be the time to switch from DB to SL depreciation'?True or False If a property’s market value becomes 0, the owner has no right to sell it at a value > 0 since this will be taxable at avery large rate.A Moving to another question will save this response. Question 3 Which the following is used to find MACRS depreciation? O Depreciable base of the asset O Each of the choices is correct O The life of the asset as determined by tax code O A percentage of the depreciable base as determined by tax code AMoving to another question will save this response. MacBoc esc F1 F2 D00 F4 F5 @ 2$ 4 Q W E tab A S F G caps lock hift C V alt %#3
- yes but we bought the asset on 1.7.2021 so the depreciation will not be for the full year. correct?Under MACRS and GAAP the acquisition cost is not fully depreciated leaving a residual value. True False 2. Regardless of the purchase date, MACRS sets how much depreciation can be recorded in the first year, while GAAP accounts for the purchase date. True False 3.A company can opt not to take the Bonus Depreciation by completing Form 4562, Depreciation and Amortization. True False 4. For buildings, MACRS, requires________________depreciation method. Sum-of-years'-digits DDB Straight-line straight-line or DDB.True or false SL depreciation assumes that an equal share of the total depreciation is not taken each year during the asset’s life?
