Question
In: Accounting
A. Alex purchased a CNC machine on 1st October 2019 at a cost of $110,000 (including...
A. Alex purchased a CNC machine on 1st October 2019 at a cost of $110,000 (including GST). This machinery is estimated to have a useful life of seven years.
B. Alex purchased a Holden car on 1 May, 2019 at a cost of $63,000, estimated to have a useful life of five years.
Required: With reference to relevant legislation and case law, discuss and calculate what amount is allowed as a deduction for the decline in value of the machinery and the Holden car discussed above, using both Prime cost and Diminishing value methods.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
A. Alex purchased a CNC machine on 1st October 2019 at a cost of $110,000 (including...
A. Alex purchased a CNC machine on 1st October 2019 at a cost of
$110,000 (including GST). This machinery is estimated to have a
useful life of seven years.
B. Alex purchased a Holden car on 1 May, 2019 at a cost of
$63,000, estimated to have a useful life of five years.
Required: With reference to relevant legislation and case law,
discuss and calculate what amount is allowed as a deduction for the
decline in value of the machinery...
Question A. Alex purchased a CNC machine on 1st October 2019 at a cost of $110,000...
Question
A. Alex purchased a CNC machine on 1st October 2019 at a cost of
$110,000 (including GST). This machinery is estimated to have a
useful life of seven years.
B. Alex purchased a Holden car on 1 May, 2019 at a cost of
$63,000, estimated to have a useful life of five years.
Required: With reference to relevant
legislation and case law, discuss and calculate what amount is
allowed as a deduction for the decline in value of the...
Note: Require plagiarism free answer A. Alex purchased a CNC machine on 1st October 2019 at...
Note: Require plagiarism free answer
A. Alex purchased a CNC machine on 1st October 2019 at a cost of
$110,000 (including GST). This
machinery is estimated to have a useful life of seven years.
B. Alex purchased a Holden car on 1 May, 2019 at a cost of $63,000,
estimated to have a useful
life of five years.
Required:
With reference to relevant legislation and case law, discuss and
calculate what amount is allowed as
a deduction for the decline...
Cheetah Copy purchased a new copy machine. The new machine cost $110,000 including installation. The company...
Cheetah Copy purchased a new copy machine. The new machine cost
$110,000 including installation. The company estimates the
equipment will have a residual value of $27,500. Cheetah Copy also
estimates it will use the machine for four years or about 8,000
total hours. Actual use per year was as follows:
Year
Hours Used
1
2,000
2
1,600
3
2,000
4
3,200
1. Prepare a depreciation schedule for four
years using the straight-line method. (Do not round your
intermediate calculations.)
2....
Monty Corp. purchased a new machine on October 1, 2019, at a cost of $124,000. The...
Monty Corp. purchased a new machine on October 1, 2019, at a
cost of $124,000. The company estimated that the machine will have
a salvage value of $15,000. The machine is expected to be used for
10,000 working hours during its 4-year life.
Compute the depreciation expense under straight-line method for
2019. (Round answer to 0 decimal places, e.g.
2,125.)
2019
Depreciation expense
$
Compute the depreciation expense under units-of-activity for
2019, assuming machine usage was 1,860 hours. (Round...
1. Blue Spruce Corp. purchased a new machine on October 1, 2019, at a cost of...
1. Blue Spruce Corp. purchased a new machine on October 1, 2019,
at a cost of $134,000. The company estimated that the machine will
have a salvage value of $20,000. The machine is expected to be used
for 10,000 working hours during its 5-year life.
Compute the depreciation expense under straight-line method for
2019. (Round answer to 0 decimal places, e.g.
2,125.)
2019 Depreciation expense:
2. Yello Bus Lines uses the units-of-activity method in
depreciating its buses. One bus was...
Mercury Inc. purchased equipment in 2019 at a cost of $110,000. The equipment was expected to...
Mercury Inc. purchased equipment in 2019 at a cost of $110,000.
The equipment was expected to produce 380,000 units over the next
five years and have a residual value of $34,000. The equipment was
sold for $63,400 part way through 2021. Actual production in each
year was: 2019 = 54,000 units; 2020 = 86,000 units; 2021 = 43,000
units. Mercury uses units-of-production depreciation, and all
depreciation has been recorded through the disposal date.
Required:
1. Calculate the gain or loss...
A machine was purchased and installed in the beginning of year 2019. The estimated cost in...
A machine was purchased and installed in the beginning of year
2019. The estimated cost in the period stated dollars is below. The
costs are in current period dollars at the end of the year. For
example, 2020 cost is reported in end of year 2020 dollars. An
inflation rate applicable to years 2020 and higher of 2.85% was
used in the estimation process. What is the machine's Present Worth
of costs including purchase amount in 2019 dollars using a...
The ABC Company bought a new machine on October 1, 2014 for $110,000. It planned to...
The ABC Company bought a new machine on October 1, 2014 for
$110,000. It planned to keep the truck for four years at which time
it expected to sell the truck for $30,000. The company elected to
amortize the truck for financial reporting purposes using the
declining balance method with an annual rate of 30%. The company
has a December 31 year-end and a corporate income tax rate of 40%.
For tax reporting purposes, you may pick one of the...
Ivanhoe Company purchased a new machine on October 1, 2017, at a cost of $ 87,800....
Ivanhoe Company purchased a new machine on October 1, 2017, at a
cost of $ 87,800. The company estimated that the machine has a
salvage value of $ 8,800. The machine is expected to be used
for 64,200 working hours during its 8-year
life.
Compute depreciation using the following methods in the year
indicated.
Declining-balance using double the straight-line rate for 2017
and 2018. (Round answers to 0 decimal places, e.g.
125)
2017
2018
Depreciation using the Declining-balance method
$ enter a...
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