1. A contractor imported a bulldozer for his job, paying250,000 to the manufacturer. Freight and insurancecharges amounted to 18,000; customs broker's fee andarrastre services, 8,500; taxes, permits and otherexpenses, 25,000.If the contractor estimates the life of the bulldozer tobe 10 years with salvage value of 20,000, determine thebook value at the end of 6 years, using the:a. SLMb. Sinking @ i=18%c. Mathesond. SYD method

Salvage value (SV) = 20,000 Service life (n) = 10 years Total expenditure on bulldozer = 250,000 +…

Answered: 1. A contractor imported a bulldozer…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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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 delete home 10
A machine cost RO 50,000 and its estimated salvage value is RO 5000 and its expected life is eight years. The depreciation expense using Straight-line for the first year is:
Bulldozer cost P12 Million and the cost of installation labor, taxes and miscellaneous expenses is P500,000.00. If the salvage value is 10% of the cost of equipment at the end of its life of 20 years, compute the book value at the end of third year using MACRS Method.
An equipment in a factory has an initial cost of Php200,000. Its salvage value after ten years is Php20,000. As a percentage of the initial cost, what is the straight-line depreciation rate of the equipment?
E. Sum of the Year's Digit Method Problem: A structure costs P120,000. It is estimated to have a life of 5 years, with a salvage value at the end of its life of P1,000. Determine the book value at the end of each year of life. Use the sum- of-the-years-digit method. (Make a table in Microsoft Excel)
A machine can be purchased for $90,000 and used for five years, yielding the following income. This income computation includes annual depreciation expense of $18,000 Income Year 1 Year 3 Year 5. $6,000 $36,000 $60,000 Compute the machine's payback period. (Round payback period answer to 2 decimal places.) Year Initial invest - Year 1 Year 2 Year 3 Year 4 Year 5 Net Income Depreciation $ Year 2 $15,000 6,000 15,000 36,000 22,500 60,000 Year 4 $22,500 Net Cash Flow $ Cumulative Net Cash Flow (90,000) $ Payback period- (90,000)
A civil engineer bought a crane for erecting tall buildings. It was invoiced from Japan (Cost,Insurance, freight) to Manila ay P 60, 000. Brokerage, custom’s, permits and etc. total P 120,000. At the end of10 years, he expects to sell it for P 70,000. Tabulate and determine the depreciation charge during the 4th year andthe book value at the end of 6th year(show solution at these years) using the following: Show solutions for the first 2 yrs
The UST-ECE Department purchased a Communications Trainer worth P 250,000. Freight and insurance charges amounted to P 18,000; customs’, cargo and broker’s fee, P 8,500; taxes, permits, and other expenses, P 25,000. If the estimated life of the trainer is 10 years with a salvage value at the end of life of P 20,000 Using DBM: The depreciation charge during the 4th year is: P 31,745.65 B. P 35,827.27 C. P 71,408.09 D. P 31,818.18 The book value at the end of 6 years is: P 71,181.82 B. P 59,201.5371,181.82 C. P 49,095.01 D. P 61,818.18
An assembly line conveyor system with a 5-year life is to be depreciated by the DDB method. The conveyor units had a first cost of $30,000 with a$9000 salvage value. The annual operating cost allocated to the conveyor is $7000 per year. The book value at the end of year 2 is closest to:a. $6,480b. $10,800c. $12,400d. $18,000
Power to a remote transmitting station is provided by a Diesel-electriegenerator unit. The original cost of the unit is P65,000. It costs P2,000 to ship the unit to the job site. An additional cost of P3,000 was incurred for installation, (a) Determine, the annual depreciation cost by the straight line method, if the unit has an expected life of 10 years. The salvage value of the unit at the end of its life was estimated at P5,000. (b) Determine the annual depreciation cost by the sinking fund method. Assume that the annualchargefor depreciation was deposited in a fund drawing compound interest at the rate of 5%
1
White Mountain Supply Company purchases warehouse shelving for $18,400. Shipping charges were $370, and assembly and setup amounted to $375. The shelves are expected to last for 8 years and have a scrap value of $700: Use the straight-line method of depreciation to answer the questions. (Round your answers to the nearest cent.) (a) What is the annual depreciation expense (in $) of the shelving)

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