A financial manager has to make a decision to replace or not an existing machine on his production line . The following information is provided salvage value from the old machine : $ 50,000 purchase value of the new machine : $ 1,000,000 cost savings : $ 500,000 cost of capital : 9 Should the manager replace the machine

A financial manager has to make a decision to replace or not an existing machine on his production line . The following information is provided salvage value from the old machine : $ 50,000 purchase value of the new machine : $ 1,000,000 cost savings : $ 500,000 cost of capital : 9 Should the manager replace the machine

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 14RE: (Appendix 11.1) Auburn Company purchased an asset on January 1, Year 1, for 150,000. The asset has a...

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Note: Double Declining Balance = 200% Declining Balance A. How much is the depreciation for year 3? Select one: o a. P158,203.13 o b. P150,000 o c. P210,937.50 o d. P187,500 В. How much is the total depreciation as of year three using DDB method? C. What is the equipment's book value at the end of year three?
(Appendix 11.1) Auburn Company purchased an asset on January 1, Year 1, for 150,000. The asset has a MACRS life of 7 years. The residual value of the asset is 35,000. Calculate the depreciation expense for Year 1 and Year 2 using MACRS.
3. Question 20 Year dt-DBB dt-SL BV 400 133.33 63.33 266.67 88.89 49.33 177.78 3. 59.26 39.44 118.52 4 39.51 32.84 79.01 26.34 29.51 49.51 16.50 29.51 20.00 Above is a 6-year depreciation schedule using DDB depreciation with conversion to SL. The year in which the conversion to SL occurred is most nearly: O Year 3 Year 4 Year 5 O Year 6
P 11-3 Depreciation methods; partial periods Chapters 10 and 11 LO11-2 [This problem is a continuation of P 10-3 in Main content d: Chapter 10 focusing on depreciation.] For each asset classification, prepare a schedule showing depreciation for the year ended December 31, 2024, using the following depreciation methods and useful lives: Land improvements-Straight line; 15 years Building-150% declining balance; 20 years Equipment-Straight line; 10 years Automobiles-Units-of-production; $0.50 per mile Depreciation is computed to the nearest month and whole dollar amount, and no residual values are used. Automobiles were driven 38,000 miles in 2024.
initial book value $ n residual value $ years years 1 $ 2 $ 3 $ 4 $ 5 $ 6 $ 7 $ 8 $ 9 $ 10 $ 11 $ 12 $ annual depreciation cumulative depreciation BV 1 $ 2 $ 3 $ 4 $ 5 $ 6 $ 7 $ 8 $ 3,000,000 9 $ 10 $ 12 11 $ 12 $ 16.67% annual depreciation cumulative depreciation BV 500,000.00 $ 416,666.67 $ 347,222.22 $ 289,351.85 $ 241,126.54 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 250,000 $ 2,750,000 500,000 $ 2,500,000 750,000 $ 2,250,000 1,000,000 $ 2,000,000 1,250,000 $ 1,750,000 1,500,000 1,250,000 1,000,000 750,000 500,000 250,000 1,500,000 $ 1,750,000 $ 2,000,000 $ 2,250,000 $ 2,500,000 $ 2,750,000 $ 3,000,000 $ 200,938.79 $ 167,448.99 $ 139,540.82 $ 116,284.02 $ 96,903.35 $ 80,752.79 $ 67,293.99 $ - 500,000.00 $2,500,000.00 916,666.67 $2,083,333.33 1,263,888.89 $1,736,111.11 1,553,240.74 $1,446,759.26 1,794,367.28 $ 1,205,632.72 1,995,306.07 $1,004,693.93 2,162,755.06 $ 837,244.94 2,302,295.88 $ 697,704.12…
1. The total depreciation for the year ended December 31, 2020 isa. P237,000 c. P233,250b. P232,500 d. P236,250 2. The carrying amount of production machine as of December 31, 2020 isa. P1,024,500 c. P1,069,500b. P1,029,000 d. P 990,750
An asset used in a four-year project falls in the five-year MACRS class for tax purposes. The asset has an acquisition cost of $6,110,000 and will be sold for $1,310,000 at the end of the project. If the tax rate is 21 percent, what is the aftertax salvage value of the asset? Refer to Table 8.3. (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.) Aftertax salvage value es ( Prev 7 of 10 Next >
What amount of depreciation should be recognized for the current year? **see attached pica. 550,000b. 600,000c. 625,000d. 460,000
Following information provided related to an Equipment: • Book value (beginning of the year) OMR 100,000 • Depreciation rate 45% Which of the following is the equipment's book value (end of the year) using written down value method? a. OMR 55,000 b. OMR 45,000 c. OMR 40,000 d. OMR 100,000
A18-5 Depreciation Period: Page 1305 Consider the following independent cases: Case 1 Case 2 Case 3 6 years 5 years 4 years Lease term, including renewals 10 years 7 years 5 years Economic life 8 years 6 years 3 years Useful life No Yes Yes Title transfer expected S10,000 $5,000 $2,000 Residual value Each of the above cases uses straight-line depreciation. Required: For each of the above cases, determine the depreciation term and the residual value used in computing the depreciable amount (original cost less residual value).
Complete the Sum of depreation Useful 8 учет Sum of Sum of years digits method of Depreciation Rate Year 1 Year 3 A 个 Fraction Year 5 ↑
1.4.13 1,00,000 1 yr. 1 yr 1 yr 0o n 0 0. 202 1/12/1212:59 2015-16 2. Depreciation under changed method : New Method : Straight Line Method (SLM) 8,100 W.D.V as on 1.4.2016 Re maining Estimated Usefule Life Annual Depreciation %3D 7 years %3D 10,414 (Approx) llustration 13: Tom and Dick Commenced business on 1st January, 2015 when they purchased Plant and Equipment for 8,00,000. The decided to (i) charge depreciation at 10% p.a under straight Line method and (ii) charge fuell year's depreciation in case of acquisition of a new asset. Their purchases of plant over the next years are as follows 1st August, 2016 * 2,00,000 pe 2nd September 2017 On 1st January, 2018 they decided to change method and rate of depreciation to 20% on diminishing balance basis with prospective effect. 4,00,000 Prepare plant and Equipment Account for the year 2016 to 2018. In the Books of Tom and Dick Machinery Account Solution : Cr. Dr. Date Particulars Amount Date Particulars 7. Amount 2014 2013 By…