3) A generator was purchased two years ago at a price of P 1, 250,000 with a governmental tax of 4% of its price. On that time, installation charges amounts to P120, 000 with a miscellaneous expenses of P 275, 000. It is expected that five years from now, it will depreciates a total value of P 1, 307, 579. 97. The generator would last ten more years from now. Depreciation method uses the Matheson Formula. Construct a depreciation table for the said generator.

3) A generator was purchased two years ago at a price of P 1, 250,000 with a governmental tax of 4% of its price. On that time, installation charges amounts to P120, 000 with a miscellaneous expenses of P 275, 000. It is expected that five years from now, it will depreciates a total value of P 1, 307, 579. 97. The generator would last ten more years from now. Depreciation method uses the Matheson Formula. Construct a depreciation table for the said generator.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Find the cash flow from the sale of the asset.

A: Depreciation:- Depreciation means the value of the asset that gets reduced over a period of time…

Q: A machinery that costs $100,000, has a service life of 5 years and a salvage value of $10,000 at the…

A: Initial Investment $ 1,00,000.00 Salvage Value $ 10,000.00 Tax Rate 30% MARR After…

Q: A company purchases

A: Depreciation is a measure of the wearing out, consumption or other loss of value of a depreciable…

Q: A depreciable property costing 1,400,000 with original residual value of 80,000 after 10 years, had…

A: Revaluation Surplus = Fair value - Carrying Amount Depreciation Expense = Cost - Residual…

Q: 20. Fahtima has purchased a bottle filling machine for P5,000,000. The plant engineer estimates that…

A: Total cost of bottle = 5,000,000 Salvage value = 10,000 Depreciation per year = (Total cost -…

Q: 4) A steam turbine was purchased five years ago at a price of P 2, 750, 000 including tax.…

A: Depreciation is the reduction in the value of an asset due to the normal usage in business.…

Q: An asset purchased today at a cost of $50,000 is depreciated straight-line down to value 0 over a…

A: First we need to calculate book value of an asset after 2 years.Book value = Cost of asset - Total…

Q: Billy Hoyle Inc. recently purchased an asset for $2,500,000 that will be used in a 3-year project.…

Q: A potential investment has a cost of $542,500 and a useful life of 7 years. Annual cash sales from…

A: 1) Calculation of NPV (in case of investment before tax): Year 1 2 3 4 5 6 7 Sales 219202…

Q: A new machine tool is being purchased for $260,000 and is expected to have a $36,000 salvage value…

A: The practice of allocating the cost of a tangible or physical item over the course of that asset's…

Q: Freedom Corporation acquired a fixed asset for $300,000. Its estimated life at time of purchase was…

A: Depreciation is the reduction in the value of asset due tonormal wear and tearEffluxion of…

Question

3) A generator was purchased two years ago at a price of P 1,250,000 with a governmental tax
of 4% of its price. On that time, installation charges amounts to P120, 000 with a miscellaneous
expenses of P 275, 000. It is expected that five years from now, it will depreciates a total value of
P 1, 307, 579.97. The generator would last ten more years from now. Depreciation method uses
the Matheson Formula. Construct a depreciation table for the said generator.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1 - Introduction

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

6) A company is considering purchasing a new automated machine that is expected to generate an additional income of $125,000 annually. The equipment will have an initial cost of $187,500 and estimated annual operating and maintenance costs of $50,000. Its estimated salvage value at the end of its useful life of 4 years will be $37,500. The equipment is a MACRS-GDS 3-year property for calculating depreciation deductions. The effective tax rate is 35%. For this new machine, determine the after-tax cash flow for each year of operation. (Round off values to the nearest dollar) ΕΟΥ BTCF a) 0 1 2 3 4 MACRS-GDS Deduction Taxable Income Tax ATCF b) (8 points) If the after-tax MARR is 10% per year compounded annually, compute the PW of the after-tax cash flows. Based on this PW, would you recommend the purchase of this new equipment?
The XYZ Corporation is investing in a $100,000 piece of machinery with 5-year useful life and $20,000 residual value. a) Using the straight-line method, how much depreciation occurs in year 1? b) Using the double-declining method, how much depreciation occurs in year 1?
Freedom Corporation acquired a fixed asset for $140,000. Its estimated life at time of purchase was 4 years, with no estimated salvage value. Assume a discount rate of 6% and an income tax rate of 40%. (Use Exhibit 12.4, Appendix C, TABLE 1 and Appendix C, TABLE 2.) Required: 1. What is the incremental present value of the tax benefits resulting from calculating depreciation using the sum-of-the-years'-digits (SYD) method rather than the straight-line (SLN) method on this asset? Use the SYD and SLN functions in Excel to calculate depreciation charges. 2. What is the incremental present value of the tax benefits resulting from calculating depreciation using the double-declining-balance (DDB) method rather than the straight-line (SLN) method on this asset? Use the SLN and DDB functions in Excel to calculate depreciation charges. 3. What is the incremental present value of the tax benefits resulting from using MACRS rather than straight-line (SLN) depreciation? The asset qualifies as a…
An asset costs $290,000 and is classified as a ten-year asset. What is the annual depreciation expense for the first three years under the straight-line and the modified accelerated cost recovery systems of depreciation? Be sure to apply the half-year convention to straight-line depreciation. Use Exhibit 9.4 to answer the question. Round your answers to the nearest dollar. Straight-line depreciation: Year Depreciation expense 1 $ 2 $ 3 $ Accelerated cost recovery system of depreciation: Year Depreciation expense 1 $ 2 $ 3 $
You are evaluating two different devices. Equipment A costs $215,000 and is used for a period of three years, with a pre-tax operating cost of $32,000 per year. Equipment B costs $355,000 and is used for six years, with a pre-tax operating cost of $42,000 per year. Both units were depreciated to book value of 0 over the life of the unit using the linear old method of depreciation, assuming a residual value of $20,000. If your tax rate is 35%, the discount rate is 9%. Calculate the average cost of the two machines for the year. Which machine do you prefer?Why?
The boiler in a steam power plant costs P 20,000,000 and has a salvage value of P 950,000 at the end of 25 years. Determine the annual depreciation of the equipment using the Straight-line method and Sinking fund method at 6% compound interest annually.
Jay Corp. bought a machine for $15,000. The machine is expected to produce 10,000 units. The machine has a residual value of $5,000. Assuming the machine produces 400 units during year 1, what should the depreciation expense be?
Electric generating and transmission equipment is placed in service at a cost of $3,000,000. It is expected to last 30 years with a salvage value of $250,000.a. What is the MACRS-GDS property class? b. Determine the depreciation deduction and the unrecovered investment during each of the first 4 tax years.