From the following facts, complete a depreciation schedule by using the straight-line method: Note: Input all amounts as positive values. Cost of Honda Accord Hybrid Residual value Estimated life. End of year 1 End of year 2 End of year 3 End of year 4 End of year 5 End of year 6 Cost of Honda Accord Depreciation expense for year $ 34,700 $ 7,100 8 years Accumulated depreciation at end of year Book value at end of year

From the following facts, complete a depreciation schedule by using the straight-line method: Note: Input all amounts as positive values. Cost of Honda Accord Hybrid Residual value Estimated life. End of year 1 End of year 2 End of year 3 End of year 4 End of year 5 End of year 6 Cost of Honda Accord Depreciation expense for year $ 34,700 $ 7,100 8 years Accumulated depreciation at end of year Book value at end of year

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter8: Depreciation And Sale Of Business Property

Section: Chapter Questions

Problem 6MCQ: Which of the following is not true about the MACRS depreciation system: A salvage value must be...

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To test your formulas, assume the machine purchased had an estimated useful life of three years (20,000, 30,000, and 50,000 hours, respectively). Enter the new information in the Data Section of the worksheet. Does your depreciation total 320,000 under all three methods? There are three common errors made by students completing this worksheet. Lets clear up two of them. One, an asset that has a three-year life should have no depreciation claimed in Year 4. This can be corrected using an =IF statement in Year 4. For example, the correct formula in cell C32 is =IF(B32D9,0,(D7D8)/D9) or =IF(B32D9, 0, SLN(D7, D8, D9)). You may wish to edit what you have already entered rather than retype it. Two, as mentioned in requirement 2, the double-declining-balance calculation needs to be modified in the last year of the assets life. Assuming you have already modified the formula for Year 4 (per instructions in step 2), alter the formula for Year 3 also. If you corrected any formulas, test their correctness by trying different estimated useful lives (between 3 and 8) in cell E9. Then reset the Data Section to the original values, save the revised file as DEPREC2, and reprint the worksheet to show the correct formulas. The third common error doesnt need to be corrected in this problem. The general form of the double-declining-balance formula needs to be modified to check the net book value of the asset each year to make sure it does not go below salvage value. =DDB does this automatically, but if you are writing your own formulas, this gets very complicated and is beyond the scope of the problem.
When depreciation is recorded each period, what account is debited? a. Depreciation Expense b. Cash c. Accumulated Depreciation d. The fixed asset account involved Use the following information for Multiple-Choice Questions 7-4 through 7-6: Cox Inc. acquired a machine for on January 1, 2019. The machine has a salvage value of $20,000 and a 5-year useful life. Cox expects the machine to run for 15,000 machine hours. The machine was actually used for 4,200 hours in 2019 and 3,450 hours in 2020.
Which of the following is not true about the MACRS depreciation system: A salvage value must be determined before depreciation percentages are applied to depreciable real estate. Residential rental buildings are depreciated over 27.5 years straight-line. Commercial real estate buildings are depreciated over 39 years straight-line. No matter when during the month depreciable real estate is purchased, it is considered to have been placed in service at mid-month for MACRS depreciation purposes.
From the following facts, complete a depreciation schedule by using the straight-line method: (Input all amounts as positive values.) Cost of Honda Accord Hybrid $ 36,800 Residual value $ 7,800 Estimated life 8 years
From the following facts, complete a depreciation schedule by using the straight-line method: (Input all amounts as positive values.) Cost of Honda Accord Hybrid $ 40,000 Residual value $ 10,000 Estimated life 6 years End of year Cost of Honda Accord Depreciation expense for year Accumulated depreciation at end of year Book value at end of year 1 2 3 4 5 6
. Convert each of the following estimates of useful life to a straight-line depreciation rate, stated as a percentage: (a) 4 years, (b) 8 years, (c) 10 years, (d) 16 years, (e) 25 years, (f) 40 years, (g) 50 years. Equipment with a cost of $200,000 has an estimated residual value of $10,000, has an estimated useful life of 19 years, and is depreciated by the straight-line method. (a) Determine the amount of the annual depreciation. (b) Determine the book value at the end of the tenth year of use. (c) Assuming that at the start of the eleventh year the remaining life is estimated to be eight years and the residual value is estimated to be $10,500, determine the depreciation expense for each of the remaining eight years.
Mazaya company uses the units-of-activity method in computing depreciation. A new plant asset is purchased for $24,000 that will produce an estimated 100,000 units over its useful life. Estimated residual value at the end of its useful life is $0. What is the depreciation cost per unit?
Use the straight-line method to complete the first row of the depreciation table for an SUV that costs $41,000, has a residual value of $5,000 and an estimated life of six years. Year Annual depreciation Accumulated depreciation End-of-year book value 1 Complete the table below. Year Annual depreciation Accumulated depreciation End-of-year book value 1 $enter your response here $enter your response here $enter your response here
Acton, Inc., uses the double-declining-balance method for depreciation on itscomputers. Which item is not needed to compute depreciation for the first year?a. Estimated residual valueb. Expected useful life in yearsc. Original costd. All the items listed are needed.
A truck acquired at a cost of $445,000 has an estimated residual value of $26,500, has an estimated useful life of 45,000 miles, and was driven 4,100 miles during the year. Determine the following. If required, round your answer for the depreciation rate to two decimal places. (a) The depreciable cost $fill in the blank 1 (b) The depreciation rate $fill in the blank 2 per mile (c) The units-of-activity depreciation for the year $fill in the blank 3 Determining Cost of Land On-Time Delivery Company acquired an adjacent lot to construct a new warehouse, paying $32,000 in cash and giving a short-term note for $337,000. Legal fees paid were $1,620, delinquent taxes assumed were $11,900, and fees paid to remove an old building from the land were $18,900. Materials salvaged from the demolition of the building were sold for $5,500. A contractor was paid $1,121,800 to construct a new warehouse. Determine the cost of the land to be reported on the balance sheet.$fill in the…
Given the data, prepare a depreciation table (Depreciation Expense, Accumulated Depreciation, Carrying Amount) for the following methods: 1. Straight line 2. Service hours 3. Production method Also, identify the Gain or Loss for each year and every deprecation method if the machine is sold at: End of 1st Yr - 500,000 End of 2nd Yr - 360,000 End of 3rd Yr - 260,000 End of 4th Yr - 165,000 End of 5th Yr - 40,000
Lisa Miller of Basket Wonders (BW) is calculating the depreciation on a machine with a depreciable basis of $50,000, an 8-year useful life, and Scrap Value is $2,000. Please, calculate depreciation by straight line method, Sum of the year’s digit method, and Double Declining Balance (DDB) method.