Answered: b. The DB Method (Declining Balance…

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Accounting

b. The DB Method (Declining Balance Method) - Provide the complete manual

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

An asset for drilling was purchased and placed in service by a petroleum production company. Its cost basis is $60,000 and it has an estimated MV of $12,000 at the end of an estimated useful life of 14 years. Compute the accumulated depreciation in the third year and the BV at the end of 5th year of life by each of these methods at the rate of 9%:

b. The DB Method (Declining Balance Method)
- Provide the complete manual solution (not excel or tables) and cash flow diagram

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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Revision of depreciation Equipment with a cost of $354,400 has an estimated residual value of $40,800, has an estimated useful life of 32 years, and is depreciated by the straight-line method. a. Determine the amount of the annual depreciation. 9,800 ✔ b. Determine the book value after 18 full years of use. $ 178,000 ✓ c. Assuming that at the start of the year 19 the remaining life is estimated to be 18 years and the residual value is estimated to be $34,000, determine the depreciation expense for each of the remaining 18 years.
The following information relating to an investment in equipment has been extracted from the books of LRB Ltd: The total purchase price is $78,560. Net sales revenue (relating to the equipment): Year-1 $38,000; Year-2 $29,000; Year-3 $24,000; and Year-4 $20,000. The required rate of return is 12%. The expected salvage value is $14,266 at the end of year 4. The depreciation rate is 18% straight line. If the applicable tax rate is 32%, calculate the tax amount in the fourth year relating to the sale of the equipment only. Use excel spreadsheet to Answer.
An asset for drilling was purchased and placed in service by a petroleum production company. Its cost basis is $75,000, and it has an estimated MV of $15,000 at the end of an estimated useful life of 15 years. Compute the BV at the end of the fifth year using GDS. Select one: O a $12,478.25 O b. $11,421.8 O C. $21,516.25 O d. $16,732.5
An asset for drilling was purchased and placed in service by a petroleum production company. Its cost basis is $60,000, and it has an estimated MV of $12,000 at the end of an estimated useful life of 14 years. compute the total depreciation amount of 9 years. use SOYD.
Your company has purchased a large new trucktractor for over-the-road use (asset class 00.26). It has a cost basis of $179,000. With additional options costing $14,000, the cost basis for depreciation purposes is $193,000. Its MV at the end of six years is estimated as $36,000. Assume it will be depreciated under the GDS: a. What is the cumulative depreciation through the end of year two? b. What is the MACRS depreciation in the second year? c. What is the BV at the end of year one? Click the icon to view the partial listing of depreciable assets used in business. Click the icon to view the GDS Recovery Rates (rk). a. The cumulative depreciation through the end of year two is $ (Round to the nearest dollar.) b. The MACRS depreciation in the second year is $ (Round to the nearest dollar.) c. The BV at the end of year one is $ (Round to the nearest dollar.)
The cost of an asset is $1,180,000, and its residual value is $260,000. Estimated useful life of the asset is five years. Calculate depreciation for the second year using the double−declining−balance method of depreciation.
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Please complete using the same formart. Thank you :)
3) Manual bending machine for bending metal pipe was purchased for $50,000 and $5,000 more was spent on its installation. The estimated residual value after 10 years was $14,000. Using Straight-Line (SL) method:- i. Calculate the annual rate of depreciation. ii. Determine the amount of depreciation and Book Value (BV) at the end of six years after the purchased of the machine.
ITEM 1: An asset for drilling was purchased and placed in service by a petroleum production company. Its cost basis is $60,000 and it has an estimated MV of $12,000 at the end of an estimated useful life of 14 years. Compute the accumulated depreciation in the third year and the BV at the end of 5th year of life by each of these methods at the rate of 9%: 1a. The SF Method 1b. The DB Method
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Assume that a machine costing $120,000 and having a useful life of 10 years (with 10 salvage value). a. Compute the depreciation expense in year 5 by using straight-line col to ensrla 15 b. Compute the depreciation expense in year 7 by using sum-of-the-years' digits c. Compute the depreciation expense in year 3 by using double-declining method Question