Requirements 1 For each depreciation method, prepare a depreciation schedule showing asset cost, depreciation expense, accumulated depreciation and asset carrying amount. For the reducing-balance method, use a depreciation rate based on: 20 000 RB rate: 1 1 0.608 0.392 = |240 000 2 Campbell prepares financial statements using the depreciation method that reports the highest profit in the early years. For income tax purposes, the firm uses the method that minimises income taxes in the early years. Consider the first year of using the equipment. Identify the depreciation methods that meet Campbell's objectives, assuming that the income tax authorities permit the use of any of the methods.

1. Determine the annual depreciation expense for each of the estimated 5 years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by (a) the straight-line method and (b) the double-declining-balance method. a. Straight-line method Additional Instruction   Accumulated Depreciation,   Year Depreciation Expense End of Year Book Value, End of Year 1       2       3       4       5                 b. Double-declining-balance method   Accumulated Depreciation,   Year Depreciation Expense End of Year Book Value, End of Year 1       2       3       4       5               New lithographic equipment, acquired at a cost of $859,200 on March 1 at the beginning of a fiscal year, has an estimated useful life of 5 years and an estimated residual value of $96,660. The manager requested…

A company comparing the use of Straight Line Depreciation (SLD) and Accelerated Depreciation (DDB) in the first year subsequent to the purchase of a capital asset would find:   The Fixed Asset Turnover ratio is highest using SLD.   The Fixed Asset Turnover ratio is highest using DDB.   No difference in the Fixed Asset Turnover ratio.   The Total Asset Turnover ratio is highest using SLD.

Answer the following questions: Required: a-1. Find the discussion of Property, Plant, and Equipment and depreciation methods used by Campbell's. Use data from the Campbell Soup Company annual report O Straight-line method O Double declining method O Written down value method a-2. Why the particular method is used for the purpose described. Straight-line depreciation is used for financial reporting purposes because depreciation expense will be lower than under any of the accelerated depreciation methods. O Straight-line depreciation is used for financial reporting purposes because depreciation expense will be higher than under any of the accelerated depreciation methods. a-3. What method do you think the company uses for income tax purposes? O Accelerated depreciation using the MACRS rates is probably used for tax purposes to minimize taxes payable. O Straight line Method using the MACRS rates is probably used for tax purposes to minimize taxes payable. Written down value Method using…