Depreciation

Instructions (a) Compute depreciation expense for 2011 and 2012 using (1) the straight-line method, (2) the units-of-activity method, and (3) the double-declining balance method. Pg. 404-407 Straight-line method- 30,000- 2,000 = 28,000 / 8 = $3,500 annually 2011- $ 3,500---- worth

Discussion Question #1  What are the differences among valuation, depreciation, amortization, and depletion? Is it appropriate to calculate depreciation using two different methods? Why?  Which depreciation method provides you the highest depreciation expense in the first year? Why? Valuation refers to the asset being recorded and disclosed at current market price regardless of whether that price is above or below cost. Depreciation is the allocation of the cost of a plant asset to expense over its

1) Inventories, is similar to the US GAAP definition under Accounting Standards Codification, ASC 330. According to Ernst & Young (2013) article, they are both based on the principle that the primary basis of accounting for inventory is cost. Both define inventory as assets held for sale in the ordinary course of business, in the process of production for such sale or to be consumed in the production of goods or services (pg.71). This which lead to the entries above. Under U.S. GAAP, the company

and equipment to sales H&M: (420+222+7134) / 78346 = 9.9% Burberry: (58.2+99.2) / 995.4 = 15.8% (b) Ratio of depreciation to sales H&M: (14+1750) / 78346 = 2.25% Burberry: (1.9+27)/ 995.4 = 2.9% The above ratios can be used to measure the efficiency of a firm’s investment policy. Burberry has a higher land, buildings and equipment to sales ratio as well as a higher depreciation to sales ratio. The higher the ratio of land, buildings and equipment to sales, the smaller the investment required

curious people interested in accounting, also the users within the accounting world. Included is; some steps taken by both the FASB and ISAB to move to fair value measurements for financial instruments and the way that it is differed, what component depreciation is and when must it be used, what revaluation for plant assets and when it should be applied, some product development expenditures are recorded as development costs so explain the difference between those accounts and how a company decides which

is expected to be used for 80,000 working hours during its 8-year life. Instructions: Compute depreciation using the following methods in the year indicated. (a) Straight-line for 2012 and 2013, assuming a December 31 year-end. (b) Declining-balance using double the straight-line rate for 2012 and 2013. (c) Units-of-activity for 2012, assuming machine usage was 2,900 hours. (Round depreciation per unit to the nearest cent.) A) 15,000 1 / 8= .125 128,000-8,000=120,000 120,000 x .125=

4. The depreciation accounting changes assume that Harnischfeger’s plant and machinery will last longer and will lose their value more slowly.  Given the business conditions Harnischfeger was facing in its primary industries in 1984, are these economic assumptions

THE UNIVERSITY OF HONG KONG School of Economics and Finance FINA1001: Financial Statement Analysis Second Semester 2009-2010 Dr. Kam-Ming Wan Midterm Examination (90 minutes) April 1, 2010 10:40a.m.(12:10p.m. Candidates may use any self-contained, silent, battery-operated and pocket-sized calculator. The calculator should have numeral-display facilities only and should be used only for the purposes of calculation. It is the candidate’s responsibility to ensure

a. Delta Airlines Depreciation Method Depreciation Method Salvage Value For every $100 mil Depreciated Annual Depreciation Prior to 1986 Straight-line, 10 years 10% 100-(.1*100)=90 90/10=9 $9 mil 1968 – 1993 Straight-line, 15 years 10% 100-(.1*100)=90 90/15=6 $6 mil After 1993 Straight-line, 20 years 5% 100-(.05*100)=95 95/20=4.75 $4.75 mil b. Singapore Airlines Depreciation Method Depreciation Method Salvage Value For every $100 mil Depreciated Annual Depreciation Prior to 1989 Straight-line

CHAPTER 11 Depreciation, Impairments, and Depletion EXERCISE 11-4 (15–25 minutes) (a) $315,000 – $15,000 = $300,000; $300,000 ÷ 10 yrs. = $30,000 (b) $300,000 ÷ 240,000 units = $1.25; 25,500 units X $1.25 = $31,875 (c) $300,000 ÷ 25,000 hours = $12.00 per hr.; 2,650 hrs. X $12.00 = $31,800 (d) 10 + 9 + 8 + 7 + 6 + 5 + 4 + 3 + 2 + 1 = 55 OR n(n + 1) = 10(11) = 55 2 2 10 X $300,000 X 1/3 = $18,182 55 9 X $300,000 X 2/3 = 32,727 55 Total for 2015 $50,909 (e) $315,000 X 20% X