A tractor for over-the-road hauling is purchased for $90,000.00. It is expected to be of use to the company for 6 years, after which it will be salvaged for $4,400.00. Calculate the depreciation deduction and the unrecovered investment during each year of the tractors life. a. Use straight-line depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 - $ 14266.67 book value for year 6 = $ 4399.10 b. Use declining-balance depreciation, with a rate that ensures the book value equals the salvage value. Provide depreciation and book value for year 6. Depreciation for year 6 - $ book value for year 6 = $ 11067.84 78932.16 c. Use double declining balance depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 - $ 11067.84 book value for year 6 - $ 78932.16 d. Use double declining balance, switching to straight-line depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 - $ book value for year 6 = $ Do all computations to 5 decimal places and round final answers to 2 decimal places. Tolerance is ± 50.
A tractor for over-the-road hauling is purchased for $90,000.00. It is expected to be of use to the company for 6 years, after which it will be salvaged for $4,400.00. Calculate the depreciation deduction and the unrecovered investment during each year of the tractors life. a. Use straight-line depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 - $ 14266.67 book value for year 6 = $ 4399.10 b. Use declining-balance depreciation, with a rate that ensures the book value equals the salvage value. Provide depreciation and book value for year 6. Depreciation for year 6 - $ book value for year 6 = $ 11067.84 78932.16 c. Use double declining balance depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 - $ 11067.84 book value for year 6 - $ 78932.16 d. Use double declining balance, switching to straight-line depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 - $ book value for year 6 = $ Do all computations to 5 decimal places and round final answers to 2 decimal places. Tolerance is ± 50.
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 13PA: Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value...
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