Following problem, (a) draw the cash flow diagram; (b) present clean and clear manual solutions to the problem; (c) highlight the final answer (only the final answer as required by the problem) by enclosing it within a box. A set of office equipment costs $80,000 and has a useful life of 8 years. Its estimated market value at the end of the 8th year is $2,000. Determine the depreciation amount on the 5th year and the book value at the end of the 3rd year using:Straight Line MethodDouble Declining Balance MethodSum-of-Years Digits MethodDeclining Balance Method with Switchover to SLMACRS GDS (assume that the assets will be disposed of on the 3rd year)NO EXCEL

•Straight line method: Depreciation will remain same for every year 5th year depreciation =…

Answered: A set of office equipment costs $80,000…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Following problem, (a) draw the cash flow diagram; (b) present clean and clear manual solutions to the problem; (c) highlight the final answer (only the final answer as required by the problem) by enclosing it within a box.

A set of office equipment costs $80,000 and has a useful life of 8 years. Its estimated market value at the end of the 8^th year is $2,000. Determine the depreciation amount on the 5^th year and the book value at the end of the 3rd year using:
- Straight Line Method
- Double Declining Balance Method
- Sum-of-Years Digits Method
- Declining Balance Method with Switchover to SL
- MACRS GDS (assume that the assets will be disposed of on the 3^rd year)