An asset has values of the PW during its economic life as shown in the table below. When should the asset be abandoned without replacement? Year PW 1 $14,408 2 $18,856 3 $21,466 4 $21,061 5 $19,614 a. year 3 b. year 5 c. year 4 d. year 1

An asset has values of the PW during its economic life as shown in the table below. When should the asset be abandoned without replacement? Year PW 1 $14,408 2 $18,856 3 $21,466 4 $21,061 5 $19,614 a. year 3 b. year 5 c. year 4 d. year 1

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter8: Depreciation And Sale Of Business Property

Section: Chapter Questions

Problem 11MCQ

See similar textbooks

Related questions

Q: Which of the following is considered when depreciating an asset under the cost model? The cost of…

A: Depreciation of Assets The purpose of calculating the depreciation of assets to determine the actual…

Q: Consider the following data on an asset:Cost of the asset. I $…

A: (a)

Q: A fixed asset with a cost of $31,737 and accumulated depreciation of $28,563.30 is sold for…

A: Carrying value of the asset is the value after deduction of accumulated depreciation from the…

Q: Valuation of assets. Using the information provided in the following table, find the value of each…

A: Here, To Find: Value of each asset =?

Q: A fixed asset with a cost of $27,355 and accumulated depreciation of $24,619.50 is sold for…

A: Given that, Cost of the fixed asset = $27335 Accumulated depreciation = $24619.50 Sale value of…

Q: In which method depreciation is charged on the book value of asset and book value is decreased each…

A: The depreciation expense is charged on fixed assets as reduction in value with the passage of time.

Q: or loss on disposal of the fixed asset? Select the correct answer. A. $2,251.69 loss

A: Correct answer is a . Explain Calculate the book value of the asset: Book value of the asset…

Q: Book value Find the book value for the asset shown in the accompanying table, assuming that MACRS…

A: MACRS rates is provided in IRS website

Q: DLW Corporation acquired and placed in service the following assets during the year: Date Acquired…

A: In the United States, businesses can deduct the cost of certain assets over time, rather than…

Q: A fixed asset with a cost of $28,567 and accumulated depreciation of $25,710.30 is sold for…

Q: 0,000 per year. Wh

A: Concept Under straight Line method, same amount of depreciation is charged on the Asset in each of…

Q: Cost of the asset, I Useful life, N Salvage value, S $130,000 5 years $5,000 Compute the annual…

A: Straight line depreciation is a method used to allocate the cost of a tangible asset equally over…

Q: fixed asset with a cost of $25,104 and accumulated depreciation of $22,593.60 is sold for $4,267.68.…

A: The gain or loss on sale of fixed assets is calculated as difference between book value of asset and…

Q: ABC bought a piece of land in a highly developing area for a purchase price of P4,000,000. Directly…

A: Purchase Price P 40,00,000.00 Cots Incurred Buying P…

Q: Find the book value for the asset shown in the accompanying table, assuming that MACRS depresiing is…

A: The asset book value needs to be calculated at the end of 3 years. The cumulative depreciation rates…

Q: Quantities at which revenues and costs are equal. breakeven point saturation point inflection point…

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: Note: Double Declining Balance = 200% Declining Balance A. How much is the depreciation for year 3?…

A: Given information is: Original cost of equipment = $15,00,000 Useful life = 8 years Depreciation…

Q: What is proper time or time period over which to match the cost of an intangible asset with revenues…

A: An intangible asset is an asset which cannot be identified physically, but its value to the…

Q: Consider the following data on an asset:Cost of the asset, I $38,000Useful…

A: Straight-line depreciation method: The depreciation method which assumes that the consumption of…

Q: onsider the following data on an asset:Cost of the asset, I $235,000Useful life, N 5 yearsSalvage…

A: Depreciation is the decrease in the value of asset due to usage and time.

Q: Consider the following data on an asset:Cost of the asset, I $38.000Useful…

A: Straight-line depreciation method: The depreciation method which assumes that the consumption of…

Q: Q: Accumulated depreciation represents: Select one: a. The depreciation taken on fixed assets for…

A: Accumulated depreciation is a contra-asset account that is deducted from the asset's original cost…

Q: A fixed asset with a cost of $31,365.00 and accumulated depreciation of $28,228.50 is sold for…

A: Given cost of asset = $31,365 Accumulated depreciation = $28,228.5 Therefore carrying value = Cost…

Q: 0-The book value of the asset sold is calculated as a. Book Value = Cost – Accumulated Depreciation…

A: Book value is the real value of the asset on the date of the financial statement. It is considered…

Q: Which of the following formulas for the capital expenditure on intangibles is correct? Assume the…

A: Capital Expenditure (CapEx) may be incurred for acquiring the intangible assets. The intangible…

Q: A fixed asset with a cost of $27,381 and accumulated depreciation of $24,642.90 is sold for…

A: A fixed asset is a long-term physical piece of real estate or equipment owned by a firm and used to…

Q: A fixed asset with a cost of $26,000 and accumulated depreciation of $23,400 is sold for $4,420.…

A: Depreciation is a reduction in the value of assets due to the usage of that asset. We can evaluate…

Q: A fixed asset with a cost of $30,192 and accumulated depreciation of $27,172.80 is sold for…

A: Fixed asset cost = $ 30,192 Accumulated depreciation = $ 27172.80 Sale amount = $ 5132.64

Q: In a written down value method, the amount of depreciation _________________. a. Increases year…

A: In a written down value method, the amount of depreciation decreases year after year

Q: 9.9 Consider the following data on an asset: Cost of the asset, / Useful life, N Salvage value, S…

A: DEPRECIATION EXPENSE Depreciation means gradual decrease in the value of an asset due to normal…

Question

An asset has values of the PW during its economic life as shown in the table below. When should the asset be abandoned without replacement?

Year	PW
1	$14,408
2	$18,856
3	$21,466
4	$21,061
5	$19,614

a. year 3

b. year 5

c. year 4

d. year 1

Expert Solution

This question has been solved!

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

SEE SOLUTION Check out a sample Q&A here

Introduction

VIEW

Explanation

VIEW

Conclusion

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Consider the following data on an asset:Cost of the asset, I $38.000Useful life. N 6 yearsSalvage value. S $0Compute the annual depreciation allowances and the resulting book values by using the DOB method and then switching to the SL method.
Consider the following data on an asset:Cost of the asset. I $ 120,000Useful life. N 5 yearsSalvage value. S $30.000Compute the annual depreciation allowances and the resulting book valtu.:s.using the following methods:(a) The straight-line depreciation method(b) TI1e declining-balance method
Consider the following data on an asset:Cost of the asset, I $38,000Useful life. N 6 YearsSalvage value. S $0 Compute the annual depreciation allowances and the resulting book values by using the DOB method and then switching to the SL method.
Problem 1. a:Consider the following data on an asset: Cost of the asset, I Useful life, N Salvage value, S $130,000 5 years $5,000 Compute the annual depreciation allowance using the straight-line depreciation method.
onsider the following data on an asset:Cost of the asset, I $235,000Useful life, N 5 yearsSalvage value, S $ 60,000Compute the annual depreciation allowances and theresulting book values, using(a) The straight-line depreciation method.(b) The double-declining-balance method
Find the book value for the asset shown in the accompanying table, assuming that MACRS depresiing is being used: View the table attached: Asset Installed Cost Recovery Period (Years) Elapsed time since purchase (Years) A $902,000 5 3
Which of the following formulas for the capital expenditure on intangibles is correct? Assume the current time (now) is t1 and last year is to, and that 'Intangible assets' is a carrying value net of accumulated amortisation. Select one: a. CapExOnIntangibles(t1) = IntangibleAssets (t1) + IntangibleAssets (t0) + Amortisation ExpenseOnIntanglibles (t1) b. CapExOnIntangibles(t1) = IntangibleAssets (t1) - IntangibleAssets(t0) + Amortisation ExpenseOnIntanglibles(t1) c. CapExOnIntangibles (t1) = IntangibleAssets(t1) - IntangibleAssets(t0) - Amortisation ExpenseOnIntanglibles (t1) d. CapExOnIntangibles(t1) = IntangibleAssets (t1) + AmortisationExpenseOnIntanglibles (t1) e. CapExOnIntangibles (t1) = IntangibleAssets (t1) - Amortisation ExpenseOnIntanglibles (t1)
LO1 The purpose of depreciation is to (a) spread the cost of an asset over its useful life. (b) show the current market value of an asset. (c) set up a reserve fund to purchase a new asset. (d) expense the asset in the year it was purchased.
Vorst depreciates Asset A on the double-declining-balance method. How much depreciation expense should Vorst record in 2020 for Asset A? a. 32,000 b. 25,600 c. 14,400 d. 6,400
Using the sum-of-the-years-digits method, how much depreciation expense should Vorst record in 2020 for Asset B? a. 6,000 b. 9,000 c. 11,000 d. 12,000
How are intangible assets with an indefinite life treated? A. They are depreciated. B. They are amortized. C. They are depleted. D. They are tested yearly for impairment.
Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the purchase of the printer impacts not only depreciation expense each year but also the assets book value. What amount will be recorded as depreciation expense each year, and what will the book value be at the end of each year after depreciation is recorded?