Equipment for immersion cooling of electronic components has an installed value of $182,000 with an estimated...

Equipment for immersion cooling of electronic components has an installed value of $182,000 with an estimated salvage value of $40,000 after 15 years. For years 2 and 10, use DDB book depreciation to determine: (a) the depreciation charge, and (b) the book value.

I want an explanation for the steps

Solutions

Expert Solution

Installed value = $ 182,000

Salvage value = $ 40,000 (after 15 years)

In case of DDB is twice of straight line depreciation.

Here the useful life is 15 years therefore under straight line method depreciation per year will be (1/15).

Under DDB the depreciation rate = (2/15)

Refer the attached picture

First year depreciation = (2/15)×182000 = $ 24266.67

BV end of year 1 = 182,000 - 24,266.67 = $ 157,733.33

BV beginning of year 2 = BV EOY 1 = $ 157,733.33

Depreciation. Year 2 =(2/15)*157,733.33 = 21,031.11

BV EoY 2 = 157,733.33 - 21031.11 = $ 136,702.11

Like this we can calculate for remaining years.

Please contact if having any query will be obliged to you for your generous support. Your help mean a lot to me,please help. Thank you.

Rahul Sunny answered 4 weeks ago

Next > < Previous

Related Solutions

solve by hand1 6.19 Equipment for immersion cooling of electronic components has an installed value of...

solve by hand1 6.19 Equipment for immersion cooling of electronic components has an installed value of $182,000 with an estimated trade-in value of $40,000 after 15 years. For years 2 and 10, use DDB book depreciation to determine (a) the depreciation charge and (b) the book value.

Cox Electric makes electronic components and has estimated the following for a new design of one...

Cox Electric makes electronic components and has estimated the following for a new design of one of its products: Fixed Cost = $3,000 Material cost per unit = $0.15 Labor cost per unit = $0.10 Revenue per unit = $0.65 Production Volume = 12,000 Per-unit material and labor cost together make up the variable cost per unit. Assuming that Cox Electric sells all it produces, build a spreadsheet model that calculates the profit by subtracting the fixed cost and total...

Cox Electric makes electronic components and has estimated the following for a new design of one...

Cox Electric makes electronic components and has estimated the following for a new design of one of its products: Fixed Cost = $15,000 Material cost per unit = $0.15 Labor cost per unit = $0.10 Revenue per unit = $0.65 Production Volume = 12,000 Per-unit material and labor cost together make up the variable cost per unit. Assuming that Cox Electric sells all it produces, build a spreadsheet model that calculates the profit by subtracting the fixed cost and total...

A manufacturer of electronic components acquires a cutting machine (CM) for $400,000. It is estimated that...

A manufacturer of electronic components acquires a cutting machine (CM) for $400,000. It is estimated that the CM will reduce operating costs by $128,000 annually since it is capable of cutting through high- thickness green ceramic ware. It will be depreciated using the MACRS method, with a recovery period of five years. The project period is six years; it is estimated that the CM will have a market value equal to 10% of its purchase price at the end of...

A manufacturer of electronic components acquires a cutting machine (CM) for $400,000. It is estimated that...

A manufacturer of electronic components acquires a cutting machine (CM) for $400,000. It is estimated that the CM will reduce operating costs by $128,000 annually, since it is capable of cutting through high-thickness green ceramic ware. It will be depreciated using the MACRS method, with a recovery period of five years. The project period is six years; it is estimated that the CM will have a market value equal to 10% of its purchase price at the end of the...

A manufacturer of electronic components acquires a cutting machine (CM) for $400,000. It is estimated that...

Jackson’s Corporation purchased equipment at a cost of $500,000. The equipment has an estimated residual value...

Jackson’s Corporation purchased equipment at a cost of $500,000. The equipment has an estimated residual value of $50,000 and an estimated life of 5 years, or 10,000 hours of operation. The equipment was purchased on January 1, 2020 and was used 2,500 hours in 2020 and 2,100 hours in 2021. On January 1, 2022, the company decided to sell the equipment for $315,000. Jackson’s Corporation uses the units-of- production method to account for the depreciation on the equipment. 1.) Will...

Trainor Corporation purchased equipment at a cost of $500,000. The equipment has an estimated residual value...

Trainor Corporation purchased equipment at a cost of $500,000. The equipment has an estimated residual value of $50,000 and an estimated life of 5 years, or 10,000 hours of operation. The equipment was purchased on January 1, 2020 and was used 2,500 hours in 2020 and 2,100 hours in 2021. On January 1, 2022, the company decided to sell the equipment for $315,000. Trainor Corporation uses the units-of- production method to account for the depreciation on the equipment. Based on...

CB Electronics must buy a piece of equipment to place electronic components on the printed circuit boards it assembles. The proposed equipment has a 10-year life with no scrap value

CB Electronics must buy a piece of equipment to place electronic components on the printed circuit boards it assembles. The proposed equipment has a 10-year life with no scrap value.The supplier has given CB several purchase alternatives. The first is to pay $175,000 now and $100,000 at the end of each year for the next 10 years. The second is to pay for the equipment in 10 equal installments of $140,000 each, starting one year from now. The third is...

A piece of equipment is purchased for $40,000 and has an estimated salvage value of $1,000...

A piece of equipment is purchased for $40,000 and has an estimated salvage value of $1,000 at the end of the recovery period, a recovery period is five years. Prepare a depreciation schedule for the piece of equipment using the straight-line method

Subjects