Volkswagen car sales hit record high sales of $6.27 million. If one of Volkswagen’s assembly lines purchased a new quality control computer verifying VIN numbers for $6,636 with a 4-year life and residual value of $1,120, what is the depreciation expense in year 2 for the QC computer? Use the straight-line method.
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Volkswagen car sales hit record high sales of $6.27 million. If one of Volkswagen’s assembly lines purchased a new quality control computer verifying VIN numbers for $6,636 with a 4-year life and residual value of $1,120, what is the
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- Cisco Systems is purchasing a new bar code - scanning device for its service center in San Francisco. The table on the right lists the relevant initial costs for this purchase. The service life of the system is 4 years and its salvage value for depreciation purposes is expected to be about 23% of the hardware cost. a. What is the cost basis of the device? b. What are the annual depreciations of the device if (i) the SL method is used? (ii) the 150% DB method is used? (iii) the 200% DB method is used? c. Calculate the book values of the device at the end of 4 years using all the methods above. Answers: (Round to the nearest dollar) (a) The cost basis of the device is $ (b) Annual depreciaitions and book values: (Round to the nearest dollar) Year 1 2 3 4 Book values at end of year 4 SL 69 69 69 69 69 150% DB 69 $ $ 200% DB 69 69 69 12 Cost Item Hardware Training Installation Cost $160,000 $16,000 $17,000Cisco Systems is purchasing a new bar code scanning device for its service center in San Francisco. The table on the right lists the relevant initial costs for this purchase. The service life of the system is 4 years and its salvage value for depreciation purposes is expected to be about 25% of the hardware cost. a. What is the cost basis of the device? b. What are the annual depreciations of the device if (i) the SL method is used? (ii) the 150% DB method is used? (iii) the 200% DB method is used? c. Calculate the book values of the device at the end of 4 years using all the methods above. Answers: (a) The cost basis of the device is (Round to the nearest dollar) (b) Annual depreciaitions and book values: (Round to the nearest dollar) Year 1 2 3 4 Book values at end of year 4 SL $ 150% DB $ 200% DB $ $ C Cost Item Hardware Training Installation Cost $165,000 $16,000 $14,000Volkwagen car sales hit record high sales of $6.23 million in 2017. If one of their assembly lines purchased a new quality control computer verifying VIN numbers for $7,985 with a 5-year life and residual value of $1,100 was purchased for the store. What is the depreciation expense in year 2 for the computer? Use the straight-line method. Depreciation expense
- Barron Chemical used a thermoplastic polymer to enhance the appearance of certain RV panels. The initial cost of one process was $130,000 with annualcosts of $49,000. Revenues were $78,000 in year 1, increasing by $1000 per year. A salvage value of $23,000 was realized when the process was discontinued after 8 years. What rate of return did the company make on the process?A high-precision programmable router for shaping furniture components is purchased by Henredon for $190,000. It is expected to last 12 years and have a salvage value of $5,000. Calculate the depreciation deduction and book value for each year. Use double declining balance switching to straight-line depreciation.New equipment to read 96-bit product codes that are replacing old bar codes has just been purchased by General Food Stores. As a trial, 1000 of the items will be initially purchased. For book depreciation purposes (not tax), the total investment of $50,000 will be written off over a 4-year period, with no salvage value, by applying one of three methods—SL, 1.75% DB, or DDB. The objective is to have the largest amount of accumulated depreciation after 2 years, in order to minimize the lost depreciation if it is again necessary to purchase new-technology readers prior to the end of the 4-year useful life of the readers just purchased. You know that the answer is the DDB method, but you must graphically demonstrate this result to your supervisor. Use a spreadsheet to do so.
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