HH purchased new shelving for its store on April 1, 2018. The shelving is expected to have a 20-year life and no residual value. The following expenditures were associated with the purchase. Cost of the shelving………………………     $12,000 Fright charges…………………………………    520 Installation of shelving………………….        2,700 Cost to repair shelf damaged during installation…. 400 I must do Compute depreciation expense for the year 2018 through 2021 under each depreciation listed below.    - Straight line, with fractional years rounded to the nearest whole month     - 200 percent declining balance, using half year convention    -  150 percent declining balance using half year conventiona. a.Hill Hardware has two conflicting objectives. Management wants to report the highest possible earning in its financial statement, yet it also wants to minimize its taxable income reported to the IRS. Explain how both these objectives can be met.b b.Which of the depreciation method applied in part a will result the lowest reported book value at the end of 2021? Is book value an estimated of an assets fair value? Explain please. 1.Assume that Hills Hardware sold the old shelving that was being replaced. The old shelving had originally cost $9,000. It books value at the time of the sale was $400. Record the sale of the old shelving under the following conditions. The shelving was sold for $1,100 cash. the shelving was sold for $175 cash.

Question

HH purchased new shelving for its store on April 1, 2018. The shelving is expected to have a 20-year life and no residual value. The following expenditures were associated with the purchase.

Cost of the shelving………………………     $12,000

Fright charges…………………………………    520

Installation of shelving………………….        2,700

Cost to repair shelf damaged during installation…. 400

I must do

Compute depreciation expense for the year 2018 through 2021 under each depreciation listed below.

   - Straight line, with fractional years rounded to the nearest whole month

    - 200 percent declining balance, using half year convention

   -  150 percent declining balance using half year conventiona.

  1. a.Hill Hardware has two conflicting objectives. Management wants to report the highest possible earning in its financial statement, yet it also wants to minimize its taxable income reported to the IRS. Explain how both these objectives can be met.b
  2. b.Which of the depreciation method applied in part a will result the lowest reported book value at the end of 2021? Is book value an estimated of an assets fair value? Explain please.
  3. 1.Assume that Hills Hardware sold the old shelving that was being replaced. The old shelving had originally cost $9,000. It books value at the time of the sale was $400. Record the sale of the old shelving under the following conditions.
  4. The shelving was sold for $1,100 cash.
  5. the shelving was sold for $175 cash.

 

 

 

 

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