A tractor for over-the-road hauling is purchased for $80,000.00. It is expected to be of use to the company for 6 years, after w will be salvaged for $3,200.00. Calculate the depreciation deduction and the unrecovered investment during each year of the tractors life. a. Use straight-line depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ book value for year 6 = $ b. Use declining-balance depreciation, with a rate that ensures the book value equals the salvage value. Provide depreciation book value for year 6. Depreciation for year 6 = $ book value for year 6 = $ c. Use double declining balance depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ book value for year 6 = $
A tractor for over-the-road hauling is purchased for $80,000.00. It is expected to be of use to the company for 6 years, after w will be salvaged for $3,200.00. Calculate the depreciation deduction and the unrecovered investment during each year of the tractors life. a. Use straight-line depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ book value for year 6 = $ b. Use declining-balance depreciation, with a rate that ensures the book value equals the salvage value. Provide depreciation book value for year 6. Depreciation for year 6 = $ book value for year 6 = $ c. Use double declining balance depreciation. Provide depreciation and book value for year 6. Depreciation for year 6 = $ book value for year 6 = $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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![A tractor for over-the-road hauling is purchased for $80,000.00. It is expected to be of use to the company for 6 years, after whic
will be salvaged for $3,200.00. Calculate the depreciation deduction and the unrecovered investment during each year of the
tractors life.
a. Use straight-line depreciation. Provide depreciation and book value for year 6.
Depreciation for year 6 = $
book value for year 6 = $
b. Use declining-balance depreciation, with a rate that ensures the book value equals the salvage value. Provide depreciation and
book value for year 6.
Depreciation for year 6 = $
book value for year 6 = $
c. Use double declining balance depreciation. Provide depreciation and book value for year 6.
Depreciation for year 6 = $
book value for year 6 = $
d. Use double declining balance, switching to straight-line depreciation. Provide depreciation and book value for year 6.
Depreciation for year 6 = $
book value for year 6 = $
Do all computations to 5 decimal places and round final answers to 2 decimal places. Tolerance is ± 50.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F44ff03fb-385e-446d-b5a4-61a2a6385394%2Fd2103d25-513e-4156-8d29-90730e7504ee%2F267gls_processed.png&w=3840&q=75)
Transcribed Image Text:A tractor for over-the-road hauling is purchased for $80,000.00. It is expected to be of use to the company for 6 years, after whic
will be salvaged for $3,200.00. Calculate the depreciation deduction and the unrecovered investment during each year of the
tractors life.
a. Use straight-line depreciation. Provide depreciation and book value for year 6.
Depreciation for year 6 = $
book value for year 6 = $
b. Use declining-balance depreciation, with a rate that ensures the book value equals the salvage value. Provide depreciation and
book value for year 6.
Depreciation for year 6 = $
book value for year 6 = $
c. Use double declining balance depreciation. Provide depreciation and book value for year 6.
Depreciation for year 6 = $
book value for year 6 = $
d. Use double declining balance, switching to straight-line depreciation. Provide depreciation and book value for year 6.
Depreciation for year 6 = $
book value for year 6 = $
Do all computations to 5 decimal places and round final answers to 2 decimal places. Tolerance is ± 50.
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