Sharpe Machining Company purchased industrial tools costing $100,000, which fall in the 3-year property class under MACRS.Use Appendix A and Exhibit 16-9 for your reference.Note: Use appropriate factor(s) from the tables provided.Required:1. Prepare a schedule of depreciation deductions assuming:a. The firm uses the accelerated depreciation schedule specified by MACRS.b. The firm uses the optional straight-line depreciation method and the half-year convention.2. Calculate the present value of the depreciation tax shield under each depreciation method listed in requirement 1. SharpeMachining Company's after-tax hurdle rate is 12 percent, and the firm's tax rate is 30 percent.Complete this question by entering your answers in the tabs below.Reg 1AYear12Reg 18The firm uses the optional straight-line depreciation method and the half-year convention.Note: Round your final answers to the nearest dollar amount.34Reg 2Straight-LineDepreciation

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Answered: Sharpe Machining Company purchased…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 3MCQ: When depreciation is recorded each period, what account is debited? a. Depreciation Expense b. Cash...

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Sharpe Machining Company purchased industrial tools costing $100,000, which fall in the 3-year property class under MACRS. Use Appendix A and Exhibit 16-9 for your reference.. Note: Use appropriate factor(s) from the tables provided. Required: 1. Prepare a schedule of depreciation deductions assuming: a. The firm uses the accelerated depreciation schedule specified by MACRS. b. The firm uses the optional straight-line depreciation method and the half-year convention. 2. Calculate the present value of the depreciation tax shield under each depreciation method listed in requirement 1. Sharpe Machining Company's after-tax hurdle rate is 12 percent, and the firm's tax rate is 30 percent. Complete this question by entering your answers in the tabs below. Req 1A Req 18 Calculate the present value of the depreciation tax shield under each depreciation method listed in requirement 1. Sharpe Machining Company's after-tax hurdle rate is 12 percent, and the firm's tax rate is 30 percent. Note:…
The Nickle Company purchased an asset for P17,000 on January 2, 2021. The asset has an expected residual value P1,000. The depreciation expense for 2021 and 2022 is shown next for three alternative depreciation methods:Year Method A Method B Method C2021 P4,000 P6,400 P6,3752022 4,000 4,800 3,984Required1. Which depreciation method is the company using in each example?2. Compute the depreciation expense for 2023 and 2024 under each method
Wendt Corporation acquired a new depreciable asset for $94,000. The asset has a 4-year expected life and a residual value of zero. Required: Question Content Area 1. Prepare a depreciation schedule for all 4 years of the asset's expected life using the straight-line depreciation method. If an amount is zero, enter "0". Wendt CorporationStraight-Line Depreciation MethodFour Years End of Year Depreciation Expense Accumulated Depreciation Book Value $fill in the blank 6b806f009f9ffea_1 Year 1 $fill in the blank 6b806f009f9ffea_2 $fill in the blank 6b806f009f9ffea_3 fill in the blank 6b806f009f9ffea_4 Year 2 fill in the blank 6b806f009f9ffea_5 fill in the blank 6b806f009f9ffea_6 fill in the blank 6b806f009f9ffea_7 Year 3 fill in the blank 6b806f009f9ffea_8 fill in the blank 6b806f009f9ffea_9 fill in the blank 6b806f009f9ffea_10 Year 4 fill in the blank 6b806f009f9ffea_11 fill in the blank 6b806f009f9ffea_12 fill in the blank 6b806f009f9ffea_13…
DLW Corporation acquired and placed in service the following assets during the year: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) Asset Date Acquired Cost Basis Computer 2/19 $ 16,300 equipment Furniture 4/27 22,900 Commercial building 10/2 319,000 Assuming DLW does not elect §179 expensing or bonus depreciation, answer the following questions: a. What is DLW's year 1 cost recovery for each asset? (Round your answers to the nearest dollar amount.) b. What is DLW's year 3 cost recovery for each asset if DLW sells all of these assets on 1/15 of year 3?(Round your answers to the nearest dollar amount.)
For each of the following assets, state both the MACRS-GDS property class, if applicable, and the specific depreciation method to be used (e.g., 15-year property, 150% DBSLH). a. A melt-indexer used in a company research lab. b. A plot of land for the production of income. c. A restaurant franchise. d. An amateur radio tower attached to land with multiple antennas on it. e. Fencing and landscaping around an office complex.
Lumax LLC purchased property, plant and equipment. The details of the PPE are given below. The appropriate amount of depreciation applicable for the current accounting period shall be: Classification of PPE OMR - cost Useful life Salvage value at the end of life Machinery 1,200,000 25 year 220,000 Land and Building - the part of land 3,500,000 40 years 400,000 value included in the total amount is estimated to be OMR 800,000. 400,000 600,000 hours 25,000 Generator engines - life if based on hours operated and during the year the company operated generators for 30,000 hours. 500,000 10 years 100,000 Furniture and fittings Chapter 5 - IAS Chapter 5 - IAS 16..pdf Chapter 4 - IAS 2 .pdf A EN
A. CALCULATE the amount, if any, of recapture of depreciation, ordinary loss or capital gain on the disposal of an asset that was sold at the end of year 1 for $ 18,000. The machine was originally purchased at a cost of $ 20,000 and was depreciated using the MACRS method for a 5 year property class. B. INDICATE if there was recapture of depreciation (D), ordinary loss (P) or capital gain (G) in the disposal of this asset. [fill these blanks] * Amount = $. ___- * Type of disposition:
Dain's Diamond Bit Drilling purchased the following assets this year. Asset Drill bits (5-year) Drill bits (5-year) Commercial building Purchase Date Mar-03 Jul-17 May-26 Problem 10-59 Part d (Algo) Assume its taxable income for the year was $61,000 for purposes of computing the §179 expense (assume no bonus depreciation). (Use MACRS Table 1, Table 2, Table 3, Table 4, and Table 5.) Note: Leave no answer blank. Enter zero if applicable. Maximum §179 expense Original Basis $ 90,800 95,800 236,000 d. If the January drill bits' original basis was $4,283,000, what is the maximum amount of §179 expense Dain's may deduct for the year? $ 3,426,400 x
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…
CALCULATE the amount, if any, of recapture of depreciation, ordinary loss, or capital gain on the disposal of an asset that was sold at the end of year 1 for $ 18,000. The machine was originally purchased at a cost of $ 20,000 and was depreciated using the MACRS method for a 5 year property class. INDICATE if there was recapture of depreciation (D), ordinary loss (P) or capital gain (G) in the disposal of this asset amount= type of arrangement=
A financial analyst is studying the income statement eff ect of two alternative depreciationmethods for a recently acquired piece of equipment. She gathers the following information about the equipment’s expected production life and use:Year 1 Year 2 Year 3 Year 4 Year 5 TotalUnits of production 2,000 2,000 2,000 2,000 2,500 10,500Compared with the units-of-production method of depreciation, if the company uses thestraight-line method to depreciate the equipment, its net income in Year 1 will most likely be:A. lower.B. higher.C. the same
A): Complete the sum-of-the-years' digits method of depreciation. *chart attached* B): Billings Corporation purchased a wood pulp mixer for $17,400. Delivery costs totaled $464. The useful is 7 years, and the salvage value is $1,372. Prepare a depreciation schedule using the sum-of-the-years' digits method. *chart attached*

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