FINANCIAL ACCT-CONNECT
8th Edition
ISBN: 9781266627903
Author: Wild
Publisher: INTER MCG
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Chapter 8, Problem 10E
Summary Introduction
Introduction:
Under the double-declining-balance method, the depreciation is charged at double the rate of depreciation calculated under the straight-line method.
To calculate: The income before depreciation, depreciation expense & income after depreciation for five years using the double-declining-balance depreciation method.
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Required information
[The following information applies to the questions displayed below.]
Tory Enterprises pays $256,400 for equipment that will last five years and have a $45,400 salvage value. By
using the equipment in its operations for five years, the company expects to earn $90,300 annually, after
deducting all expenses except depreciation.
Prepare a table showing income before depreciation, depreciation expense, and net (pretax) income for each year and for the total
five-year period, assuming straight-line depreciation is used.
Year 1
Year 2
Year 3
Year 4
Year 5
Totals
8
O
Income Before
Depreciation
$
reciation
Expense
0 $
6
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10
Tory Enterprises pays $254,400 for equipment that will last five years and have a $45,200 salvage value. By using the equipment in its operations for five years, the company expects to earn $90,100 annually, after deducting all expenses except depreciation.
Prepare a table showing income before depreciation, depreciation expense, and net (pretax) income for each year and for the total five-year period, assuming straight-line depreciation is used.
Tory Enterprises pays $238,400 for equipment that will last five years and have a $43,600 salvage value. By using the equipment in its operations for five years, the company expects to earn $88,500 annually, after deducting all expenses except depreciation. Prepare a table showing income before depreciation, depreciation expense, and net (pretax) income for each year and for the total five-year period, assuming double-declining-balance depreciation is used.
Chapter 8 Solutions
FINANCIAL ACCT-CONNECT
Ch. 8 - Prob. 1DQCh. 8 - Prob. 2DQCh. 8 - Prob. 3DQCh. 8 - Prob. 4DQCh. 8 - Prob. 5DQCh. 8 - Prob. 6DQCh. 8 - Prob. 7DQCh. 8 - Prob. 8DQCh. 8 - Identify events that might lead to disposal of a...Ch. 8 - Prob. 10DQ
Ch. 8 - Prob. 11DQCh. 8 - Prob. 12DQCh. 8 - Prob. 13DQCh. 8 - Prob. 14DQCh. 8 - Prob. 15DQCh. 8 - Prob. 16DQCh. 8 - Prob. 17DQCh. 8 - Prob. 18DQCh. 8 - Prob. 19DQCh. 8 - Prob. 20DQCh. 8 - Prob. 21DQCh. 8 - Prob. 1QSCh. 8 - Prob. 2QSCh. 8 - Straight-line depreciation P1 On January 2, 2016,...Ch. 8 - Prob. 4QSCh. 8 - Computing revised depreciation C2 On January 2,...Ch. 8 - Prob. 6QSCh. 8 - Prob. 7QSCh. 8 - Prob. 8QSCh. 8 - Prob. 9QSCh. 8 - Prob. 10QSCh. 8 - Identify the following assets a through i as...Ch. 8 - Prob. 12QSCh. 8 - Prob. 13QSCh. 8 - Caleb Co. owns a machine that costs $42,400 with...Ch. 8 - Prob. 15QSCh. 8 - Prob. 1ECh. 8 - Prob. 2ECh. 8 - Prob. 3ECh. 8 - Prob. 4ECh. 8 - Prob. 5ECh. 8 - Prob. 6ECh. 8 - Prob. 7ECh. 8 - Prob. 8ECh. 8 - Prob. 9ECh. 8 - Prob. 10ECh. 8 - Prob. 11ECh. 8 - Prob. 12ECh. 8 - Prob. 13ECh. 8 - Prob. 14ECh. 8 - Prob. 15ECh. 8 - Prob. 16ECh. 8 - Partial-year depreciation; disposal of plant asset...Ch. 8 - Prob. 18ECh. 8 - Prob. 19ECh. 8 - Prob. 20ECh. 8 - Prob. 21ECh. 8 - Prob. 22ECh. 8 - A Exchanging assets P5 Gilly Construction trades...Ch. 8 - Recording plant asset disposals P2 P5 On January...Ch. 8 - Prob. 25ECh. 8 - Plant asset costs; depreciation methods C1 P1...Ch. 8 - Prob. 2PSACh. 8 - Prob. 3PSACh. 8 - Prob. 4PSACh. 8 - Prob. 5PSACh. 8 - Onslow Co. purchases a used machine for $178,000...Ch. 8 - Prob. 7PSACh. 8 - Prob. 8PSACh. 8 - Prob. 1PSBCh. 8 - Prob. 2PSBCh. 8 - Asset cost allocation; straight-line depreciation...Ch. 8 - Computing and revising depreciation; revenue and...Ch. 8 - Computing and revising depreciation; selling plant...Ch. 8 - Prob. 6PSBCh. 8 - Prob. 7PSBCh. 8 - Prob. 8PSBCh. 8 - Prob. 8SPCh. 8 - Prob. 1BTNCh. 8 - Prob. 2BTNCh. 8 - Prob. 3BTNCh. 8 - Teams are to select an industry, and each team...Ch. 8 - Prob. 5BTNCh. 8 - Prob. 7BTNCh. 8 - Prob. 9BTN
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- A machine costing 350,000 has a salvage value of 15,000 and an estimated life of three years. Prepare depreciation schedules reporting the depreciation expense, accumulated depreciation, and book value of the machine for each year under the double-declining-balance and sum-of-the-years-digits methods. For the double-declining-balance method, round the depreciation rate to two decimal places.arrow_forwardRequired information [The following information applies to the questions displayed below.] Tory Enterprises pays $250,400 for equipment that will last five years and have a $44,800 salvage value. By using the equipment in its operations for five years, the company expects to earn $89,700 annually, after deducting all expenses except depreciation. Prepare a table showing income before depreciation, depreciation expense, and net (pretax) income for each year and for the total five-year period, assuming straight-line depreciation is used. Year 1 Year 2 Year 3 Year 4 Year 5 Totals Answer is complete but not entirely correct. Income Before Depreciation Depreciation Net (Pretax) Income Expense $ 89,700 89,700 89,700 89,700 89.700 448,500 $ $ 100,160 $ 100,096 X 36,058 X 9,286 x 0 245,600 $ (10,460) X 29,604 53,642 80,414 89,700 242,900arrow_forwardory Enterprises pays $256,400 for equipment that will last five years and have a $45,400 salvage value. By using the equipment in its operations for five years, the company expects to earn $90,300 annually, after deducting all expenses except depreciation. Calculate annual depreciation expenses using double-declining-balance method.Prepare a table showing income before depreciation, depreciation expense, and net (pretax) income for each year and for the total five-year period, assuming double-declining-balance depreciation.arrow_forward
- Required information [The following information applies to the questions displayed below.] Tory Enterprises pays $256,400 for equipment that will last five years and have a $45,400 salvage value. By using the equipment in its operations for five years, the company expects to earn $90,300 annually, after deducting all expenses except depreciation. Calculate annual depreciation expense using double-declining-balance method. Prepare a table showing income before depreciation, depreciation expense, and net (pretax) income for each year and for the total five-year period, assuming double-declining-balance depreciation is used. Complete this question by entering your answers in the tabs below. Depreciation Schedule Calculate annual depreciation expenses using double-declining-balance method. Note: Round Annual Depreciation to the nearest whole dollar. Year Income Computation Year 1 Depreciation for the Period Beginning of Period Book Value O 8 Depreciation Annual Rate 9 Depreciation * prt…arrow_forward[The following information applies to the questions displayed below.] Tory Enterprises pays $248,400 for equipment that will last five years and have a $44,600 salvage value. By using the equipment in its operations for five years, the company expects to earn $89,500 annually, after deducting all expenses except depreciation. Calculate annual depreciation expense using double-declining-balance method. Prepare a table showing income before depreciation, depreciation expense, and net (pretax) income for each year and for the total five-year period, assuming double-declining-balance depreciation is used. Complete this question by entering your answers in the tabs below. Depreciation Income Schedule Computation Calculate annual depreciation expenses using double-declining-balance method. Note: Round Annual Depreciation to the nearest whole dollar. Year Year 1 Year 2 Year 3 Year 4 Year 5 Total 2 W Depreciation for the Period Beginning of Period Book Value $ 248,400 149,040 #3 Depreciation…arrow_forwardAn asset with a first cost of $300,000 is depreciated by the MACRS method using a 5-year recovery period. Determine the monetary value added to the corporation by the asset in year two of its service, if the net operating profit after taxes is $70,000 and the company uses an aftertax interest rate of 15%. The MACRS depreciation rates for years 1 and 2 are 20% and 32%, respectively.arrow_forward
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