Accounting: What the Numbers Mean
11th Edition
ISBN: 9781259535314
Author: David Marshall, Wayne William McManus, Daniel Viele
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 6, Problem 6.12E
Exercise 6.12 LO 3
Financial statement effects of
Required:
State the effect (higher, lower, no effect) of accelerated depreciation relative to straight-line depreciation on:
- Depreciation expense in the first year.
- The asset’s net book value after two years.
Cash flows from operations (excluding income taxes).
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QUESTION 19
Which method of depreciation will result in the greatest depreciation charge in the last year of the asset's useful life?
Double-declining balance
Straight-line
Sum-of-the-years' digits
Triple-declining balance
stion 9
Which statement below is TRUE of the straight-line method of depreciation?
a.
It is a method that will provide higher amounts of depreciation expense in the early years of an asset's life and smaller amounts in the later years.
Ob.
It is a method that results in unequal amounts of depreciation expense each year.
Oc.
It is a method that is based upon the actual amounts of an asset used up each year, such as the number of miles a truck is driven.
d.
It is a method that results in equal amounts of depreciation expense each year.
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QUESTION 29
Which of the following statement best describes depreciation?
a. It is a means of spreading the payment for non-current assets over a period of years
Ob.It is a decline in the market value of assets
Oc. It is a means of spreading the cost of non-current assets over the estimated useful life
d.It is a means of estimating the amount of money needed to replace the assets
Chapter 6 Solutions
Accounting: What the Numbers Mean
Ch. 6 - Prob. 6.1MECh. 6 - Prob. 6.2MECh. 6 - Mini-Exercise 6.3 LO 3 Depreciation calculation...Ch. 6 - Prob. 6.4MECh. 6 - Mini-Exercise 6.5 LO 9 Goodwill Backstreets Co....Ch. 6 - Prob. 6.6MECh. 6 - Exercise 6.7 LO 1 Basket purchase allocation...Ch. 6 - Prob. 6.8ECh. 6 - Prob. 6.9ECh. 6 - Prob. 6.10E
Ch. 6 - Exercise 6.11 LO 3 Effect of depreciation on ROI...Ch. 6 - Exercise 6.12 LO 3 Financial statement effects of...Ch. 6 - Exercise 6.13 LO 3 Depreciation calculation...Ch. 6 - Exercise 6.14 LO 3 Depreciation calculation...Ch. 6 - Prob. 6.15ECh. 6 - Prob. 6.16ECh. 6 - Prob. 6.17ECh. 6 - Exercise 6.18 LO 9 Goodwill-effect on ROI and...Ch. 6 - Exercise 6.19 LO 6, 8, 9 Transaction...Ch. 6 - Exercise 6.20 LO 3, 4, 6, 8 Transaction...Ch. 6 - Prob. 6.21PCh. 6 - Prob. 6.22PCh. 6 - Prob. 6.23PCh. 6 - Problem 6.24 LO 3 Partial-year depreciation...Ch. 6 - Problem 6.25
LO 3
Identify depreciation methods...Ch. 6 - Prob. 6.26PCh. 6 - Prob. 6.27PCh. 6 - Prob. 6.28PCh. 6 - Prob. 6.29PCh. 6 - Prob. 6.30PCh. 6 - Prob. 6.31PCh. 6 - Prob. 6.32PCh. 6 - Prob. 6.33CCh. 6 - Prob. 6.34CCh. 6 - Case 6.35 LO 3, 6 Capstone analytical review of...
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- Exercise 24-4 (Algo) Payback period, unequal cash flows, and depreciation adjustment LO P1 A machine can be purchased for $130,000 and used for five years, yielding the following income. This income computation includes annual depreciation expense of $26,000. Income Year 1 $8,800 Year 2 $21,800 Year 3 $57,000 Year 4 $32,900 Year 5 $87,200 Compute the machine's payback period. (Round payback period answer to 2 decimal places.) × Answer is complete but not entirely correct. Year Net Income Depreciation Net Cash Flow Cumulative Net Cash Flow Initial invest $ (130,000) $ (130,000) Year 1 $ 8,800 $ 26,000 34,800 34,800 x Year 2 21,800 26,000 47,800 82,600 × Year 3 57,000 26,000 83,000 130,000 ☑ Year 4 32,900 26,000 Year 5 87,200 26,000 Payback period = 2.57 yearsarrow_forwardQUESTION 6 If an asset is book depreciated by the DDB (Double Declining Balance) method over a 5-year period, how long will it take to reach its salvage value if the estimated salvage is 24% of the first cost? The time taken to reach the estimated salvage value, (in years) Round off to the nearest three (3) decimal placesarrow_forwardQUESTION 5 A financial asset with a RRR of 12.30% is not expected to pay any cash flow for the following seven years. Its first cash flow of $1.82 is expected to be paid in eight years. The cash flows are expected to stay constant in perpetuity. What should the price of this asset be today? $5.85 $6.57 O $7.38 $6.46arrow_forward
- QUESTION 9 Amotor vehicle which cost £30,000 is depreciated at 20% per annum using the reducing balance method. The depreciation charge for the second year would be: a. £13,800 b.E8,000 c. £4,800 24,000x20%=£4,800 d.£7,200arrow_forwardCash Flow Asset End of Year Amount Appropriate Required Return B 1 through Infinity $300 15% using cell References to the given datea, calculate the value of asset Barrow_forwardG Revisit Choose the best option If an entity employs the sum-of-the-years'-digits (SYD) method of depreciation for an asset with an estimated useful life of 4 years, the percentage of the total depreciable cost that will be expensed in the third year is O 0.10 O 0.25 0.20 O 0.70arrow_forward
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Accounting for Derivatives_1.mp4; Author: DVRamanaXIMB;https://www.youtube.com/watch?v=kZky1jIiCN0;License: Standard Youtube License
Depreciation|(Concept and Methods); Author: easyCBSE commerce lectures;https://www.youtube.com/watch?v=w4lScJke6CA;License: Standard YouTube License, CC-BY