Daniels company purchased a machine for $100000. Useful life 5 years(book and tax) no salvage value....

Daniels company purchased a machine for $100000. Useful life 5 years(book and tax) no salvage value. Record depreciation for 5 yaers using straight line, double declining balance, MACRS

Expert Solution

SLM
Cost of Machine	100,000.00
Salvage Value	-
Life in years	5.00
Particulars	1	2	3	4	5
Opening Balance	100,000.00	80,000.00	60,000.00	40,000.00	20,000.00
Depreciation = (100,000 - 0)/5	20,000.00	20,000.00	20,000.00	20,000.00	20,000.00
Closing balance	80,000.00	60,000.00	40,000.00	20,000.00	-

Double Declining balance
Life	5 Years
Double decling balance method rate = 20%*2	40%
Particulars	1	2	3	4	5
Opening Balance	100,000.00	60,000.00	36,000.00	21,600.00	12,960.00
Depreciation at 40%	40,000.00	24,000.00	14,400.00	8,640.00	5,184.00
Closing balance	60,000.00	36,000.00	21,600.00	12,960.00	7,776.00
MACRS Depreciation
Year	MACRS Rate	Depreciation
1.00	20.00%	20,000.00
2.00	32.00%	32,000.00
3.00	19.20%	19,200.00
4.00	11.52%	11,520.00
5.00	11.52%	11,520.00

ekkarill92 answered 3 years ago

A machine costs Rs. 10,000 with useful life of 5 years. It has a salvage value...

A machine costs Rs. 10,000 with useful life of 5 years. It has a salvage value of Rs. 2,000 at the end of its useful life. The machine is expected to generate the following cash flows; Year Cash Flow (PKR) 1 5,000 2 6,000 3 8,000 4 6,500 5 4,000 Calculate Accounting Rate of Return? Tax is applied at 30% per annum. Why Accounting Rate of Return is not among the favorite methodology to evaluate a project? In what circumstances...

Your Company purchased a machine with an estimated useful life of 8 years. The machine will...

Your Company purchased a machine with an estimated useful life of 8 years. The machine will generate cash inflows of $96,000 each year. The salvage value at the end of the project is $80,000. Your Company's discount rate is 6%. The net present value of the investment is ($7,500). What is the purchase price of the machine?

Given an asset with initial cost of $20,000, useful life of 5 years, salvage value =...

Given an asset with initial cost of $20,000, useful life of 5 years, salvage value = 0, find the depreciation allowances and the book values using the a. Straight-Line Method b. MACRS

AA purchased a van (cost: $50,000, salvage value: $5,000, useful life: 5 years). 1. Under straight-line...

AA purchased a van (cost: $50,000, salvage value: $5,000, useful life: 5 years). 1. Under straight-line method, how much is the book value at the end of 3rd year of its useful life? $18,000 $20,000 $23,000 $27,000 2. Under double-declining balance method, how much is the book value at the end of 5thyear? $2,333 $5,432 $6,221 None of the above 3. Under sum-of-years’ digits method, how much is the accumulated depreciation at the end of 3rd year? 4. Under sum-of-years’...

Equipment is purchased on July 1, 2011 for $250,000. The estimated salvage value and useful life...

Equipment is purchased on July 1, 2011 for $250,000. The estimated salvage value and useful life are $25,000 and 5 years, respectively. What is the depreciation expense for 2012 under: (1) straight-line method, (2) sum-of-years-digits method, and (3) double-declining balance method The answer is S-L: 45,000 DDB: 80,000SYD:67,500 Can you please explain step by step solution.

Consider an asset with the cost basis of $500,000, useful life of 5 years and salvage...

Consider an asset with the cost basis of $500,000, useful life of 5 years and salvage value of 10,000 at the end of its useful life. This asset generates yearly revenue of $275,000 and its operating cost is $55,000 per year. Average inflation rate is estimated to be 4% over the next 5 years. Calculate tax saving in year 2 due to depreciation; if the double declining method is used for depreciation (tax rate is 30%). (Report your answer in...

Melody Corporation purchased a machine for $400,000. This machine has a useful life of 10 years...

Melody Corporation purchased a machine for $400,000. This machine has a useful life of 10 years and an estimated salvage of $20,000. Depreciation was recorded on a straight-line basis for 7 years. After recording depreciation expense in the 7th year, Melody sold the machine for $100,000. (a) What is the carrying value of the machine at the point of sale? (10 pts) (b) How much gain or loss should Melody report on the sale? (6 pts). Clearly identify if the...

Equipment costing $590,000 with an expected useful life of 10 years and an expected salvage value...

Equipment costing $590,000 with an expected useful life of 10 years and an expected salvage value of $40,000, was purchased at the beginning of the year. Calculate the depreciation expense for the first five years using: (a) Sum-of-the-years' digits method. Do not round until final calculation. Round answers to the nearest whole number. (b) Double-declining balance method (without straight-line switchover). Do not round until final calculation. Round answers to the nearest whole number.

Equipment costing $540,000 with an expected useful life of 10 years and an expected salvage value...

Equipment costing $540,000 with an expected useful life of 10 years and an expected salvage value of $40,000, was purchased at the beginning of the year. Calculate the depreciation expense for the first five years using: (a) Sum-of-the-years' digits method. Do not round until final calculation. Round answers to the nearest whole number. Year 1 $Answer Year 2 $Answer Year 3 $Answer Year 4 $Answer Year 5 $Answer (b) Double-declining balance method (without straight-line switchover). Do not round until final...

7.If there is a change in an estimate of the salvage value and/ or useful life...

7.If there is a change in an estimate of the salvage value and/ or useful life of a company car, how would you calculate the change in the depreciation expense? Explain your answer and provide the formula you would use to solve this problem. 8.What is the difference between capital expenditures and revenue expenditures? 9.What is the difference between ordinary repairs and extraordinary repairs? 10.What is the formula to calculate depletion per unit? What are the steps to calculate the...

Question