A tax- and duty-free importation of a 30hp sand mill (for paint manufacturing) cost 360,000. CIP Manila Bank charges, arrester, and brokerage cost 5,000. Foundation and installation cost were 25,000. Other incidental expenses amounted to 20,000. Salvage value of the mill is estimated to be 60,000 after 20 years. Determine the appraisal value of the mill using straight line method of depreciation at the end of 10 years. a.235,000 b.450,000 c. 342,000 d. 125,900
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A tax- and duty-free importation of a 30hp sand mill (for paint manufacturing) cost 360,000. CIP Manila Bank charges, arrester, and brokerage cost 5,000. Foundation and installation cost were 25,000. Other incidental expenses amounted to 20,000. Salvage value of the mill is estimated to be 60,000 after 20 years. Determine the appraisal value of the mill using straight line method of
a.235,000
b.450,000
c. 342,000
d. 125,900
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- I need help in figuring out the step by step procedure, performing the operations and calculations manually, using formulas. One year ago, your company purchased a machine used in manufacturing for $110,000. The current machine is expected to produce EBITDA of $20,000 per year. The current machine is being depreciated on a straight-line basis over a useful life of 11 years, after which it will have no salvage value, so depreciation expense for the current machine is $10,000 per year. The market value today of the current machine is $50,000. You have learned that a new machine is available that offers many advantages; you can purchase it for $150,000 today. It will be depreciated on a straight-line basis over 10 years, after which it has no salvage value. You expect that the new machine will produce EBITDA (earning before interest, taxes, depreciation, and amortization) of $40,000 per year for the next 10 years. All other expenses of the two machines are identical.Your company’s tax…Material-handling equipment used in the manufacture of grain products (MACRS-GDS 10-year property) is purchased and installed for $180,000. It is placed in service in the middle of the tax year. If it is removed just before the end of the tax year approximately 4.5 years from the date placed in service, determine the depreciation deduction during each of the tax years involved using MACRS-GDS allowances. ———————- Repeat the previous problem if the material-handling equipment is removed just after the tax year, again using MACRS-GDS allowances.A granary has two options for a conveyor used in the manufacture of grain for transporting, filling, or emptying. One conveyor can be purchased and installed for $70,000 with $3,000 salvage value after 16 years. The other can be purchased and installed for $110,000 with $4,000 salvage value after 16 years. Operation and maintenance for each is expected to be $18,000 and $14,000 per year, respectively. The granary uses MACRS-GDS depreciation, has a income-tax rate of 25%, and a MARR of 9% after taxes. Use MACRS-GDS(10) with 50% bonus depreciation.
- With reference to the straight-line depreciation method, which statement is false? (a) An equal amount of depreciation is allocated in each year. (b) The book value of the asset decrements by a fixed amount each year. (c) The depreciation life (n) is set based on the MACRS property classes. (d) The asset is depreciated down to a book value equal to the salvage value.A crane rental company has acquired a new heavy-duty crane for $280,000. The company calculates depreciation on this equipment on the basis of number of rentals per year, and the salvage value of the crane at the end of its 12-year life is $40,000. If the crane is rented an average of 133 days per year, what is the depreciation rate per rental? The depreciation is per day of rent. (Round to the nearest dollar.)ABC Corporation makes its policy that for every new equipment purchased, the annual depreciation should not exceed 20% of the first cost at any time without salvage value. Determine the length of service if the depreciation used is the SOYD Method.
- A granary has two options for a conveyor used in the manufacture of grain for transporting, filling, or emptying. One conveyor can be purchased and installed for $ 60,000 with $ 4,500 salvage value after 16 years. The other can be purchased and installed for $120,000 with $ 4,000 salvage value after 16 years. Operation and maintenance for each is expected to be $ 21,000 and $ 18,000 per year, respectively. The granary uses MACRS-GDS depreciation, has a marginal tax rate of 25%, and has a MARR of 9% after taxes. Determine which alternative is less costly, based upon comparison of after-tax annual worth.ABC Company makes its policy that for every new piece of equipment purchased, the annual depreciation should not exceed 25% of the first cost at any time without salvage value. determine the length of service if the depreciation used is the Double Declining Balanced method.Determine the rate of depreciation, the total depreciation, the total depreciation up to the end of the 8th year and the book value at the end of 8 years for an asset that costs P 15,000 new and has an estimated scrap value of P 2,000 at the end of 10 years by (a) Declining balance method (b) Double Declining balance method
- A manufacturing company makes it a policy that for every new equipment purchased, the annual depreciation cost should not exceed 25% of the first cost at any time without salvage value. Determine the length of service life if the depreciation used is the SYD methodYour company has purchased a large new trucktractor for over-the-road use (asset class 00:26). It has a cost basis of $185,000. With additional options costing $13,000, the cost basis for depreciation purposes is $198,000. Its MV at the end of six years is estimated as $37,000. Assume it will be depreciated under the GDS: a. What is the cumulative depreciation through the end of year four? b. What is the MACRS depreciation in the second year? c. What is the BV at the end of year one? Click the icon to view the partial listing of depreciable assets used in business Click the icon to view the GDS Recovery Rates (r). a. The cumulative depreciation through the end of year four is $ (Round to the nearest dollar.) b. The MACRS depreciation in the second year is $ (Round to the nearest dollar.) c. The BV at the end of year one is $ (Round to the nearest dollar.)A certain commodity is amounting P1million. Freight and installation chargesamounted to 3% of the purchased price. It is expected to have a life of 8 years with a salvage value of 12% of the first cost. Determine the depreciation charge during the 5th year using MACRS Method.