Spreadsheet Depreciation and Rate of Return Burrell Company purchased a machine for $12,000 on January 2, 2019. The machine has an estimated service life of 5 years and a zero estimated residual value. The asset earns income before depreciation and income taxes of $6,000 each year. The tax rate is 30%. Required: Compute the rate of return earned (on the average net asset value) by the company each year of the asset's life under the straight-line and the double-declining-balance depreciation methods. Assume that the machine is the company's only asset. Straight-line method. If required, round to one decimal place. 2019 2020 23.3 % 30 % 2021 42 % 2022 2023 70 210 % Double-declining-balance depreciation method. Round to two decimal places. Round your intermediate dollar value calculations to the nearest whole number. 2019 8.75 % 2020 37.92 % 2021 86.52 % 2022 167.50 % 2023 L
Spreadsheet Depreciation and Rate of Return Burrell Company purchased a machine for $12,000 on January 2, 2019. The machine has an estimated service life of 5 years and a zero estimated residual value. The asset earns income before depreciation and income taxes of $6,000 each year. The tax rate is 30%. Required: Compute the rate of return earned (on the average net asset value) by the company each year of the asset's life under the straight-line and the double-declining-balance depreciation methods. Assume that the machine is the company's only asset. Straight-line method. If required, round to one decimal place. 2019 2020 23.3 % 30 % 2021 42 % 2022 2023 70 210 % Double-declining-balance depreciation method. Round to two decimal places. Round your intermediate dollar value calculations to the nearest whole number. 2019 8.75 % 2020 37.92 % 2021 86.52 % 2022 167.50 % 2023 L
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 2E: Depreciation Methods Sorter Company purchased equipment for 200,000 on January 2, 2019. The...
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![Spreadsheet
Depreciation and Rate of Return
Burrell Company purchased a machine for $12,000 on January 2, 2019. The machine has an estimated service life of 5 years and a zero estimated residual value. The asset earns income before depreciation and income taxes of $6,000 each year. The tax rate is 30%.
Required:
Compute the rate of return earned (on the average net asset value) by the company each year of the asset's life under the straight-line and the double-declining-balance depreciation methods. Assume that the machine is the company's only asset.
Straight-line method. If required, round to one decimal place.
2019
2020
23.3 %
30 %
2021
42 %
2022
2023
70
210
%
Double-declining-balance depreciation method. Round to two decimal places. Round your intermediate dollar value calculations to the nearest whole number.
2019
8.75 %
2020
37.92
%
2021
86.52 %
2022
167.50 %
2023
L](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F065ec98e-d57a-4630-89e8-d7a1ca9324d3%2F2fc5d036-ba5b-4afe-a33f-49927b36e8a2%2Fk3ua1j_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Spreadsheet
Depreciation and Rate of Return
Burrell Company purchased a machine for $12,000 on January 2, 2019. The machine has an estimated service life of 5 years and a zero estimated residual value. The asset earns income before depreciation and income taxes of $6,000 each year. The tax rate is 30%.
Required:
Compute the rate of return earned (on the average net asset value) by the company each year of the asset's life under the straight-line and the double-declining-balance depreciation methods. Assume that the machine is the company's only asset.
Straight-line method. If required, round to one decimal place.
2019
2020
23.3 %
30 %
2021
42 %
2022
2023
70
210
%
Double-declining-balance depreciation method. Round to two decimal places. Round your intermediate dollar value calculations to the nearest whole number.
2019
8.75 %
2020
37.92
%
2021
86.52 %
2022
167.50 %
2023
L
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