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Q1. On 1st April 2008 Abdulla installs a new machinery costing SAR 312,000 with a five...
Q1. On 1st April 2008 Abdulla installs a new machinery costing SAR 312,000 with a five year life and estimated salvage value of SAR28000. Management estimates that the machine will produce 1136000 units of the product during its lifetime. Actual units of production were as follows:
1st year 245600 units,
2nd year 230400 units,
3rd year 227000 units,
4th year 232600 units
& 5th year 200400 units.
Compute depreciation Expenses under Straight-line method, Double declining balance method and Units of production Method method the machine must not be depreciated below its estimated salvage value.
q2. Depletion and Amortization are the processes of allocating the cost of a of different asset to expense in the accounting periods benefiting from its use. Explain the assets applicable for such processes.
q3. Explain the methods that can estimate bad debt expenses in business. (Give numerical examples)
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Q2. On 1st April 2008 Abdulla installs a new machinery costing SAR 312,000 with a five...
Q2. On 1st April 2008 Abdulla installs a new machinery costing
SAR 312,000 with a five year life and estimated salvage value of
SAR28000. Management estimates that the machine will produce
1136000 units of the product during its lifetime. Actual units of
production were as follows: 1st year 245600 units, 2nd year 230400
units, 3rd year 227000 units, 4th year 232600 units & 5th year
200400 units. Compute depreciation Expenses under Straight-line
method, Double declining balance method and Units of...
On 1st April 2008 Abdulla installs a new machinery costing SAR 312,000 with a five year...
On 1st April 2008 Abdulla installs a new machinery costing SAR
312,000 with a five year life and estimated salvage value of
SAR28000. Management estimates that the machine will produce
1136000 units of the product during its lifetime. Actual units of
production were as follows:
1st year 245600 units,
2nd year 230400 units,
3rd year 227000 units,
4th year 232600 units &
5th year 200400 units.
Compute depreciation Expenses under Straight-line method,
Double declining balance method and Units of production...
23 On April 1st Moon Ltd. purchased and placed into service a new warehouse and the...
23 On April 1st Moon Ltd. purchased and placed into
service a new warehouse and the land it resides on in the outskirts
of Miami. The cost of the purchase was $1,870,000 ($1,550,000 is
allocated to the building and the remaining to the land). What is
the depreciation amount that should be charged by the company in
the first year (round-up to the nearest $)? Justify your answer.
24 Airfresh Ltd. sells specialised welding machines for
$652,000. It bought the...
John purchased new machinery for his small business factory on 1st June 2018 for $8,000. The...
John purchased new machinery for his small business factory on
1st June 2018 for $8,000. The effective life of the machinery is
determined to be five years. John sold his old business machinery
for $4,000 on 31 August 2019. John used this machinery 90% for
business purposes. With reference to the relevant legislation and
case law, discuss the tax consequences arising from the disposal of
the old machinery under the prime cost method
Klingon Cruisers, Inc., purchased new cloaking machinery five years ago for $10 million. The machinery can...
Klingon Cruisers, Inc., purchased new cloaking machinery five
years ago for $10 million. The machinery can be sold to the
Romulans today for $9.1 million. Klingon's current balance sheet
shows net fixed assets of $8 million, current liabilities of
$780,000, and net working capital of $220,000. If all the current
accounts were liquidated today, the company would receive $1.02
million cash.
a.
What is the book value of Klingon's assets today? (Do
not round intermediate calculations and enter your answer...
Q1.ABC Company purchased a new machinery two years ago for $61724. Today, it is selling this...
Q1.ABC Company purchased a new machinery two
years ago for $61724. Today, it is selling this machinery for
$21938. What is the after-tax salvage value if the tax rate is 36
percent?
The MACRS allowance percentages are as follows, commencing with
year one: 20.00, 32.00, 19.20, 11.52, 11.52, and 5.76 percent.
Q2.ABC Company purchased $85737 of equipment 4
years ago. The equipment is 7-year MACRS property. The firm is
selling this equipment today for $52564. What is the After-tax
Salvage...
A firm is considering the replacement of its existing machine with new automated machinery costing $850,000....
A firm is considering the replacement of its existing machine
with new automated machinery costing $850,000. The new machine will
lead to an increase in cash sales of $280,000 p.a. Annual interest
expense will increase from $15,000 to $25,000.
Annual cash operating expenses are currently $300,000 and will
decrease by $60,000 with the new machine. The new machine has a
five-year life for tax purposes and for internal management
accounting the firm assumes all non-current assets have a ten-year
tax...
A firm is considering the replacement of its existing machine with new automated machinery costing $850,000....
A firm is considering the replacement of its existing machine
with new automated machinery costing $850,000. The new machine will
lead to an increase in cash sales of $280,000 p.a. Annual interest
expense will increase from $15,000 to $25,000.
Annual cash operating expenses are currently $300,000 and will
decrease by $60,000 with the new machine. The new machine has a
five-year life for tax purposes and for internal management
accounting the firm assumes all non-current assets have a ten-year
tax...
A firm is considering the replacement of its existing machine with new automated machinery costing $850,000....
A firm is considering the replacement of its existing machine
with new automated machinery costing $850,000. The new machine will
lead to an increase in cash sales of $280,000 p.a. Annual interest
expense will increase from $15,000 to $25,000.
Annual cash operating expenses are currently $300,000 and will
decrease by $60,000 with the new machine. The new machine has a
five-year life for tax purposes and for internal management
accounting the firm assumes all non-current assets have a ten-year
tax...
A firm is considering the replacement of its existing machine with new automated machinery costing $850,000....
A firm is considering the replacement of its existing machine
with new automated machinery costing $850,000. The new machine will
lead to an increase in cash sales of $280,000 p.a. Annual interest
expense will increase from $15,000 to $25,000.
Annual cash operating expenses are currently $300,000 and will
decrease by $60,000 with the new machine. The new machine has a
five-year life for tax purposes and for internal management
accounting the firm assumes all non-current assets have a ten-year
tax...
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