Problem 5 - Property Plant and Equipment Requirements: Calculate the (A) Cost Basis, (B) Straight line, and (C) Activity Method for Depreciation Purchase of a Truck Given cost base Price of $ 110,000 Tax and delivery $ 10,000 Salvage Value $ 20,000 Asset Life 5 years Estimated Mileage Traveled per year Yr 1 50,000 Yr 2 40,000 Yr 3 35,000 Yr 4 40,000 Yr 5 45,000 210,000 Miles (A) Cost Basis Calculations: (B) Straight Line Method Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Calculations: (C) Activity Method Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Calculations:
Problem 5 - Property Plant and Equipment Requirements: Calculate the (A) Cost Basis, (B) Straight line, and (C) Activity Method for Depreciation Purchase of a Truck Given cost base Price of $ 110,000 Tax and delivery $ 10,000 Salvage Value $ 20,000 Asset Life 5 years Estimated Mileage Traveled per year Yr 1 50,000 Yr 2 40,000 Yr 3 35,000 Yr 4 40,000 Yr 5 45,000 210,000 Miles (A) Cost Basis Calculations: (B) Straight Line Method Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Calculations: (C) Activity Method Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Calculations:
College Accounting (Book Only): A Career Approach
13th Edition
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:Scott, Cathy J.
ChapterA: Methods Of Depreciation
Section: Chapter Questions
Problem 3P: Use the information in Problem A-1 to solve this problem. Required Prepare a schedule of...
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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| Problem 5 - Property Plant and Equipment |
| Requirements: Calculate the (A) Cost Basis, (B) Straight line, and (C) Activity Method | |||||
| for |
|||||
| Purchase of a Truck | |||||
| Given cost base Price of | $ 110,000 | ||||
| Tax and delivery | $ 10,000 | ||||
| Salvage Value | $ 20,000 | ||||
| Asset Life | 5 years | ||||
| Estimated Mileage Traveled per year | |||||
| Yr | 1 | 50,000 | |||
| Yr | 2 | 40,000 | |||
| Yr | 3 | 35,000 | |||
| Yr | 4 | 40,000 | |||
| Yr | 5 | 45,000 | |||
| 210,000 | Miles |
| (A) | Cost Basis | |||
| Calculations: | ||||
| (B) | ||||
| Yr | 1 | |||
| Yr | 2 | |||
| Yr | 3 | |||
| Yr | 4 | |||
| Yr | 5 | |||
| Calculations: | ||||
| (C) | Activity Method | |||
| Yr | 1 | |||
| Yr | 2 | |||
| Yr | 3 | |||
| Yr | 4 | |||
| Yr | 5 | |||
| Calculations: |
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