Straight-Line Depreciation Method: Office Mart purchases a photocopier for $70,000. The photocopier has a salvage value of $7,000 and has expected life of seven years. Office Mart uses the straight-line depreciation method. • Calculate the annual depreciation expense. What is the year one book value? • What is the year three book value? • What is the year six accumulated depreciation?
Straight-Line Depreciation Method: Office Mart purchases a photocopier for $70,000. The photocopier has a salvage value of $7,000 and has expected life of seven years. Office Mart uses the straight-line depreciation method. • Calculate the annual depreciation expense. What is the year one book value? • What is the year three book value? • What is the year six accumulated depreciation?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Straight-Line
Transcribed Image Text:Double-Declining-Balance Depreciation Method: Office Mart purchases a photocopier for $70,000. The photocopier has a
salvage value of $7,000 and has expected life of seven years. Office Mart uses the double-declining-balance depreciation
method. (NOTE: Use the DDB Rate in the EXCEL spreadsheet and round the rate to three decimal places.)
Calculate the year one depreciation expense.
What is the year one book value?
Calculate the year three depreciation expense.
What is the year three book value?
What is the year six accumulated depreciation?
In what year is a "plug" amount used instead of the formula to calculate the depreciation expense? Year
(just
type the number)
How much is that "plug" amount?
Transcribed Image Text:Straight-Line Depreciation Method: Office Mart purchases a photocopier for $70,000. The photocopier has a salvage value of
$7,000 and has expected life of seven years. Office Mart uses the straight-line depreciation method.
Calculate the annual depreciation expense.
What is the year one book value?
• What is the year three book value?
What is the year six accumulated depreciation?
Units-of-Production Depreciation Method: Office Mart purchases a photocopier for $70,000. The photocopier has a salvage
value of $7,000 and is expected to produce 787,500 copies over its life. Office Mart uses the units-of-production depreciation
method and the expected copies per year for the eight years are:
1. 115,000 copies.
2. 119,250 сорies.
3. 124,000 сорies.
4. 114,250 соpіies.
5. 111,250 соpies.
6. 105,750 соpies.
7.98,000 copies.
What is the depreciable cost per copy?
(round to two decimal places and format per text)
• Calculate the year one depreciation expense.
What is the year one book value?
Calculate the year three depreciation expense.
What is the year three book value?
What is the year six accumulated depreciation?
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