Academy Sports purchased a crane at a cost of $80,000. The crane has an estimated salvage value of $5,000 and an estimated life of 8 years, or 12,500hours of operation. The crane was purchased on January 1, 2022 and was used for 2,700 hours in 2022 and 2,600 hours in 2023.Based on this information, what method of depreciation will produce the maximum depreciation expense for 2022?

Depreciation is the invisible expense which we have to charge on all tangible asset (except land).…

Answered: Based on this information, what method…

Business

Accounting

Based on this information, what method of depreciation will produce the maximum depreciation expense for 2022?

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: An asset used in a 4-year project falls in the 5-year MACRS class (refer to MACRS table on page…

A: The objective of the question is to calculate the after-tax salvage value of an asset. The after-tax…

Q: An asset used in a 4-year project falls in the 5 year MACRS class, for tax purposes. The asset has…

A: Salvage value net of tax is that amount which is received by the investor from selling the assets at…

Q: Assume that it is January 1, 2022, and that the Mendoza Company is considering the replacement of a…

A: Cash flow after taxes determines the company's financial performance which provides clear pictire on…

Q: Briefly explain what a “§ 197 intangible” is and why Congress decided to throw all purchased…

A: The general rule of Section 197 on intangibles states that a taxpayer would be entitled to…

Q: On January 1, 2021, the Mason Manufacturing Company began construction of a building to be used as…

A: A company identifies borrowings—or portions of borrowings—that were particularly used to fund an…

Q: An asset used in a 4-year project falls in the 5-year MACRS class for tax purposes. The asset has an…

A: The after-tax salvage value is the amount of cash a company receives from selling an asset at the…

Q: Compute the 2025 amortization and the 12/31/25 book value, assuming that at the beginning of 2025,…

A: Amortization is the amount of expense which is shown in the income statement as decrease in the…

Q: Based on the above and the result of your audit, answer the following: (Disregard tax implications)…

A: 3. Depreciation expense of Asset P for the year 2020 = P14500 Depreciation expense of Asset R for…

Q: Sherrod purchased an asset in 2020 at a cost of $80 million. Depreciation expense for financial and…

A: A deferred tax liability represents the amount of income tax that a company will have to pay in the…

Q: f using the 15th edition of the text (or an earlier edition), refer to the Web Tax Appendix to…

A: NPV is a financial metric used to evaluate the profitability of investment or project. It is a…

Q: What A company buys a new machine on July 1, 2022, and it is put into use immediately. Purchase…

A: The objective of the question is to calculate the annual depreciation using two different methods:…

Q: In the System, if you sell an asset that belongs to a particular class that faces a depreciation…

A: When you sell equipment after using the equipment and if that is sold above value than there is…

Q: An asset used in a four-year project falls in the five-year MACRS class (MACRS schedule) for tax…

A: After-tax salvage value refers to a price of an asset that is used for the sale and the profit is…

Q: Property, Plant, and Equipment

A: (Note: Since you have posted a multi-part question, we will solve the first three parts for you. For…

Q: The direct capitalization method can be used to quickly value a building. You are evaluating a…

A: The GIM is calculated by dividing the sales price of comparable properties by their gross income. In…

Q: b. What would Timberline's maximum depreciation deduction be for 2023 assuming no bonus…

A: A deduction is an item of expense that a company can deduct from the revenue. It reduces the…

Q: This problem is based on historical information that is at least partly true: In 1626 Dutch…

A: Compounded annual growth rate is the effective annual rate for the change in value of a investment…

Q: An asset used in a 4-year project falls in the 5-year MACRS class, for tax purposes. The asset has…

A: Book value= (purchase price)*(1-sum of MACR rates from beginning to current date)= 20349349 *(1-(20%…

Q: Assume the information given in part (c) above. Also assume that the benefits of the input device…

A: Explanation:Step 1: Determine the Depreciation MethodIn order to calculate depreciation, it's…

Q: A major addition to equipment should have been capitalized in the year 2021 but was incorrectly…

A: *** IF THE ADDITIONS MADE TO ASSET WHICH BRINGS THE PROBABLE ENHANCED FUTURE CASH INFLOWS FROM THE…

Q: (b) Compute the depreciation expense for the year ended December 31, 2026. Vaughn elected to…

A: Depreciation expense is the reduction in the value of asset due to its use or wear and tear.…

Q: • Capitalization period: January 1, 2019, to June 30, 2020 • Expenditures on project: 2019: 2020:…

A: The questions asked about the amount of capitalized interest and depreciation. Borrowing cost: The…

Q: How were the depreciation rate and the PV factor at 12% calculated? (the equations)

A: Depreciation rate for 3 year MACRS is provided in the table and is universally available.…

Q: Consider the following information from a company's records for 2020: Materials used in research and…

A: R&D expenses are typically accounted for on a company's income statement. They are considered…

Q: What about the salvage value of $800 at the end?

A: Salvage value refers to the estimated residual value of an asset at the end of its useful life. It…

Q: 1. How much is the present value of the purchase of equipment? 2. How much is the Ipresont valu

A: We can determine the PV of salvage value and PV of annual cash inflow using the formula below:MARR =…

Question

Academy Sports purchased a crane at a cost of $80,000. The crane has an estimated salvage value of $5,000 and an estimated life of 8 years, or 12,500
hours of operation. The crane was purchased on January 1, 2022 and was used for 2,700 hours in 2022 and 2,600 hours in 2023.
Based on this information, what method of depreciation will produce the maximum depreciation expense for 2022?

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: Calculation of depriciation as per straight line method

VIEW

Step 3: Calculation of depriciation as per double declining method

VIEW

Step 4: Depreciation as per unit of production method.

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 5 steps

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

View Policies Current Attempt in Progress The following transactions occurred during 2025. Assume that depreciation of 10% per year is charged on all machinery and 5% per year on buildings, on a straight-line basis, with no estimated salvage value. Depreciation is charged for a full year on all fixed assets acquired during the year, and no depreciation is charged on fixed assets disposed of during the year. Jan. 30 Mar. 10 Mar. 20 May 18 June 23 A building that cost $168,960 in 2008 is torn down to make room for a new building. The wrecking contractor was paid $6,528 and was permitted to keep all materials salvaged. Date Machinery that was purchased in 2018 for $20,480 is sold for $3,712 cash, f.o.b. purchaser's plant. Freight of $384 is paid on the sale of this machinery. A gear breaks on a machine that cost $11,520 in 2017. The gear is replaced at a cost of $2,560. The replacement does not extend the useful life of the machine but does make the machine more efficient. L A special…
Based upon the provided information, how would I be able to calculate the Amortization of prior service costs and expected return on the plan assets? Additionally, would you be able to please help me understand what formula to use in these two calculations and why you use those. Thank you!
An asset used in a 4-year project falls in the 5-year MACRS class for tax purposes. The asset has an acquisition cost of $9,300,000 and will be sold for $2,760,000 at the end of the project. If the tax rate is 22 percent, what is the aftertax salvage value of the asset? Refer to (MACRS schedule) (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567) Aftertax salvage value 4
(Multiple Choice Question) The reason why the amortization on a natural resource is not expensed at the end of each year is because: 1. Natural resources often increase in value 2. Natural resources have an indefinite life span 3. The market value of the natural resource can increase or decrease depending on the situation 4. The resource that is extracted is expected to be sold
How do you prepare the depreciation for the year 2026?
Prepare a nowchart for MACRS depreciationicost recovery of fixed assets. You may limit your flowchart to tangible personal property falling into the 5 and 7 year classes and roal property used in rental and non-rental classes. For purposes of your flowchart, you should assume that Soction 179 exists as well as any "bonus depreciation" provisions that would apply to 2023 acquisitions. Your flowchart does not need to reflect any limitations applicable to automobiles. You may also ignore any depreciation implications related to: Section 179 bonus depreciation on REAL property Alternate MACRS lives/ methods Alternative Minimum Tax State Income taxes You should base your flowchart on 2023 tax provisions. FORMAT Your fiowchart(s) should be asable reference tool that one could follow to determine the proper treatment for any covered situation.
john purcharses a new car in 2023 for a price 37000. if he claim first year bonus depreciation, what is the greatest allowable depreciation deduction he may claim for the vehicle in 2023
If an asset cost £27,000 with no scrap value, and the annual depreciation charge calculated using the straight-line method is £6,750 per annum, then depreciation is being charged at the rate of(SLM depreciation rate)?
A project requires an investment of $800 in a fixed asset that is classified as a five-year asset under MACRS. The project will have a three-year life. Find the depreciation for year three.
An asset used in a 4-year project falls in the 5-year MACRS class (MACRS Table) for tax purposes. The asset has an acquisition cost of $18,720,000 and will be sold for $4,160,000 at the end of the project. If the tax rate is 22 percent, what is the aftertax salvage value of the asset?
If using the 15th edition of the text (or an earlier edition), refer to the Web Tax Appendix to correctly answer this question. Cornett Inc. is considering a new investment whose data are shown below. The required equipment will be used for 3 years during the project's life. The equipment qualifies for bonus depreciation, so it will be fully depreciated at the time of purchase. It will have a positive salvage value at the end of Year 3, when the project would be terminated. Also, some new net operating working capital would be required, but it would be recovered at the end of the project's life. Revenues and operating costs are expected to be constant over the project's 3-year life. What is the project's NPV? WACC 10% Purchase price of equipment $250,000 Required new NOWC $25,000 Sales revenues $310,000 Operating costs $186,000 Before-tax salvage value $45,000 Tax rate 25% a. $10,324.94 b. $27,229.53 c. $44,134.11 d. $53,525.55 e. $62,916.98
An asset was acquired on January 1, 2020 for P800,000 and is expected to have a 5-year useful life. The straight-line method was used. On January 1, 2022, the asset was deemed to have a sound value of P720,000. How much is the revaluation surplus for the period ended December 31, 2022?