company purchase a machine costing $100,000 for 5years without salvage value. using straight line method and...

company purchase a machine costing $100,000 for 5years without salvage value. using straight line method and double declining method macrs

Daniels company purchased a machine costing $100,000 for 5 years useful life without salvage value. suing straight line and double declining method macrs

Expert Solution

SLM
Cost of Machine	100,000.00
Salvage Value	-
Life in years	5.00
Particulars	Year 1	Year 2	Year 3	Year 4	Year 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	-

Life	5 Years
Double decling balance method rate = 20%2*	40%
Particulars	Year 1	Year 2	Year 3	Year 4	Year 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	12,960.00
Closing balance	60,000.00	36,000.00	21,600.00	12,960.00	-

ekkarill92 answered 2 years ago

A machine that cost $68,616 on January 1, 2014 was depreciated by Ava Company using the straight line method.

A machine that cost $68,616 on January 1, 2014 was depreciated by Ava Company using the straight line method. The machine had no residual value and a useful life of 8 Years. On January 1. 2017, the company switched to the sum of years’-digits method. What is the depreciation expense for the year ended December 31, 2017 $____

A machine costing Rm 100,000 has a life expentancy of five years and a salvage value Rm 20,000

A machine costing Rm 100,000 has a life expentancy of five years and a salvage value Rm 20,000. Calculate: a) accumulated depreciation b) book value at the end of three years using the straight line method

The Typhoon Company uses straight-line depreciation. It lowers an estimated salvage value, resulting in a depreciation...

The Typhoon Company uses straight-line depreciation. It lowers an estimated salvage value, resulting in a depreciation expense higher than previous year amounts. In addition to the recording of depreciation for the current year a) A restatement of financial statements and a credit to Accumulated Depreciation b) A restatement of financial statements and a debit to Accumulated Depreciation c) No restatement of financial statements and a credit to Accumulated Depreciation d) No restatement of financial statements and a debit to Accumulated...

Polycorp is considering the purchase of a machine for $600,000. The salvage value at the end...

Polycorp is considering the purchase of a machine for $600,000. The salvage value at the end of its three-year life is $100,000. Annual cash operating revenues are $700,000, $600,000 and $550,000 in years 1, 2 and 3, and cash expenses (before interest) are $300,000, $250,000 and $200,000 respectively. The machine will be depreciated for tax purposes using straight-line depreciation of 25% per year. Assume a corporate tax rate of 30% (tax is paid in the year the income is earned)....

.A machine cost $200,000 and has a salvage value of $100,000 if kept for one year....

.A machine cost $200,000 and has a salvage value of $100,000 if kept for one year. The salvage value will decrease by $50,000 in years 2 and 3 and remain zero after year 3. The operating costs are $50,000 the first year and increase by $50,000 per year. So operating costs in year two will be $100,000, and in year three $150,000 and so on. How long should the equipment be kept so that annual cost is minimized if the...

(Straight Line Depreciation) A new machine cost $100,000, and will increase inventory by $10,000, A/R by...

(Straight Line Depreciation) A new machine cost $100,000, and will increase inventory by $10,000, A/R by $15,000, and A/P by $5,000. This machine will reduce our expenses by $18,000 per year. The machine will be depreciated to a zero book value in 10 years, but could be sold for $12,000 at the end of 10 years. The marginal tax rate is 35%, and the cost of capital is 12%. Calculate the payback, NPV, IRR, and PI.

OPTION 1: The initial purchase price of the machine is $30,000. The salvage value at the...

OPTION 1: The initial purchase price of the machine is $30,000. The salvage value at the end of the useful life will be $4,000. Maintenance costs are $2,000 for the first year and are estimated to increase by $200 per year. OPTION 2: The machine is leased for an initial payment of $2,000 plus annual payments of $3,500. There is no salvage value. Annual maintenance cost is $10,000. Put down the present value of each of the items specified for...

Using straight-line depreciation, what is the book value after four years for an asset costing 170,000...

Using straight-line depreciation, what is the book value after four years for an asset costing 170,000 that has a salvage value of 21,000 after 10 years? What is the depreciation charge in the fifth year (Use 5 significant figures for your calculations and round your answer to the nearest dollar)? a. Book value after four years? b. Depreciation charge in the fifth year?

What is the effect of using the accelerated depreciation method (as opposed to the straight-line method)...

What is the effect of using the accelerated depreciation method (as opposed to the straight-line method) for assets on a company’s earnings before taxes (EBT), and thus the tax liability?

4.A machine cost $200,000 and has a salvage value of $100,000 if kept for one year....

4.A machine cost $200,000 and has a salvage value of $100,000 if kept for one year. The salvage value will decrease by $50,000 in years 2 and 3 and remain zero after year 3. The operating costs are $50,000 the first year and increase by $50,000 per year. So operating costs in year two will be $100,000, and in year three $150,000 and so on. How long should the equipment be kept so that annual cost is minimized if the...

Question