Determine the depreciation of the equipment with a cost of 560,000.00 For a period of 6years...

Determine the depreciation of the equipment with a cost of 560,000.00

For a period of 6years life the salvage value is 5% of the cost. use 3 methods of depreciation. If you want to resale the machine on the 3rd year which method you will use and why.

Expert Solution

Answer:

If I want to resale at the end of 3rd year, I shall use Double declining balance.

Reason: As depreciation is tax deductible, I would like to choose the method which gives maximum tax benefit in first 3 years. The accumulated depreciation under double declining balance at the end of year 3 is maximum at $394,074.07

ekkarill92 answered 3 months ago

Equipment that cost $594000 and has accumulated depreciation of $270000 is exchanged for equipment with a...

Equipment that cost $594000 and has accumulated depreciation of $270000 is exchanged for equipment with a fair value of $432000 and $108000 cash is received. The exchange lacked commercial substance. The new equipment should be recorded at: *Please show all work** The answer is $259,200 but not sure how to get it

Equipment that cost $398,100 and has accumulated depreciation of $318,900 is exchanged for equipment with a...

Equipment that cost $398,100 and has accumulated depreciation of $318,900 is exchanged for equipment with a fair value of $160,000 and $40,000 cash is received. The exchange lacked commercial substance. (a) Calculate the gain to be recognized from the exchange. Gain recognized $

Equipment with an original cost of $51,422 and accumulated depreciation of $33,306 was sold at a...

Equipment with an original cost of $51,422 and accumulated depreciation of $33,306 was sold at a loss of $5,155. As a result of this transaction, cash would a.increase by $12,961 b.increase by $51,422 c.decrease by $5,155 d.decrease by $33,306

Which of the following is a period cost? a. Wages of an assembly worker b. Depreciation...

Which of the following is a period cost? a. Wages of an assembly worker b. Depreciation on factory equipment c. Sales commissions d. Power A cost that has been incurred in the past and is irrelevant is termed a(n): a. variable cost. b. opportunity cost. c. sunk cost. d. differential cost. Compute factory overhead cost from the following costs: Depreciation on factory buildings $ 45,950 Depreciation on office equipment 32,980 Direct materials used 96,840 Indirect labor 6,580 a. $96,840 b....

Historical cost of equipment is $27,000. Calculate depreciation expense, accumulated depreciation, and book value for two...

Historical cost of equipment is $27,000. Calculate depreciation expense, accumulated depreciation, and book value for two years. Useful life is 4 years.

Which of the following is not a fixed cost? Depreciation on factory equipment Property taxes on...

Which of the following is not a fixed cost? Depreciation on factory equipment Property taxes on factory building Property insurance on factory building Payroll taxes on factory employees

1. Braxton Company purchased printing equipment at a cost of $24,000. The monthly depreciation on the...

1. Braxton Company purchased printing equipment at a cost of $24,000. The monthly depreciation on the equipment is $400. As of December 31, 2011, the balance in Accumulated Depreciation is $9,600. The book value of the equipment reported on the December 31, 2011 balance sheet will be a. $24,000 b. $23,600 c. $14,400 d. $9,600 2. On October 1, 2011, Greer Company signed a $10,000 six-month note payable that bears interest at a rate of 6%. Since no interest has...

Journal Entries Jan 1 Equipment with a historical cost of $10,000 and an accumulated depreciation of...

Journal Entries Jan 1 Equipment with a historical cost of $10,000 and an accumulated depreciation of $3,000 was sold for $6,000 Jan 2 Equipment with a historical cost of $20,000 and an accumulated depreciation of $18,000 was disposed of with an additional disposal cost of $1,300. Jan 2 Sanford Company borrowed $24,000 on a short-term discounted 90 day, 3.0% noninterest-bearing note payable. Jan 3 Sanford Company paid $18,000 in advance for the 6 month rental of a warehouse. Jan 3...

Lease or Sell Kincaid Company owns equipment with a cost of $363,300 and accumulated depreciation of...

Lease or Sell Kincaid Company owns equipment with a cost of $363,300 and accumulated depreciation of $56,600 that can be sold for $275,700, less a 3% sales commission. Alternatively, Kincaid Company can lease the equipment for three years for a total of $288,500, at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incurred by Kincaid Company on the equipment would total $16,500 over the three year lease....

1. If the Company AD has an equipment with original cost $20,000,000, depreciation is 80% of...

1. If the Company AD has an equipment with original cost $20,000,000, depreciation is 80% of the cost of equipment, and the book value is $4,000,000. At the end of its physical life time year, if the Company can sell the equipment for $5,000,000 in the market, what is the gain on sale? What is the after tax (AT) net salvage value if the tax rate is 40%? 2.For two projects A and B, both have initial capital outlay of...

Question