ZZZ INC bought a computer (5-year property) on July 31 with a basis of $5,500 and some machinery (7-year property) on November 15 with a basis of $18,000. Calculate the maximum depreciation expense, rounded to a whole number (ignoring §179 and bonus depreciation):
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- Bliss Company owns an asset with an estimated life of 15 years and an estimated residual value of zero. Bliss uses the straight -line method of depreciation. At the beginning of the sixth year, the assets book value is 200,000 and Bliss changes the estimate of the assets life to 25 years, so that 20 years now remain in the assets life. Explain how this change will be accounted for in Blisss financial statements, and compute the current and future annual depreciation expense.Akron Incorporated purchased an asset at the beginning of Year 1 for 375,000. The estimated residual value is 15,000. Akron estimates that the asset has a service life of 5 years. Calculate the depreciation expense using the sum-of-the-years-digits method for Years 1 and 2 of the assets life.A piece of construction equipment (asset class 15.0) was purchased by the Jones Construction Company. The cost basis was $300,000. Solve, a. Determine the GDS and ADS depreciation deductions for this property. b. Compute the difference in PW of the two sets of depreciation deductions in Part (a) if i = 12% per year.
- COCOLOS Industries uses the straight-line depreciation method. One asset had been purchased for $6,000. Annual depreciation expense was $600.00 after considering residual value of $1,000. What was the approximate life of the asset? a. 5.0 yearsb. 8.3 yearsc. 9.5 yearsd. 10.2 years.The Counting House, Inc., purchased 5-year property class equipment for $60,000. It uses theDiminishing Balance method(20%) of depreciation. What is depreciation for the second year of the asset'slife?A device has an initial cost of $896,000 and a GDS property life of 7 years. Depreciation of this particular equipment started in year 0, using the MACRS method with the standard half year convention. During year 4, the company received $417,000 in revenue and spent $241,000 in operating expenses. What is the annual cash flow in Year 4, assuming that depreciation is the only book deduction? The income tax rate at this particular operation is 21%.
- Keller Industries uses the straight-line depreciation method. One asset had been purchased for $6,000. Annual depreciation expense was $600. after considering residual value of $1,000. What was the approximate life of the asset? a. 5.0 years b. 8.3 years c. 9.5 years d. 10.2 yearsEntity A acquired an asset that had a cost of P130,000. The asset is being depreciated over a 5-year period using the sum-of-the-years’ digit method. It has a salvage value estimated at P10,000. The loss/gain if the asset is sold for P38,000 at the end of the third year is ?1. Mainland purchased a machine for $85,000 on 1 January 20x7 and assigned it a useful life for 10 years. On 31 March 20x9 it was revalued to $93,000 with no change in useful life. a) Complete the table below and show your workings. ASSETS Property (Acc. Depreciation) NBV OWNER'S EQUITY Revaluation surplus INCOME STATEMENT Depreciation expense Comprehensive income Gain on revaluation of property Jan 1, x7 Dec 31, x7 Dec 31, x8 For 20x8 For 20x9 Mar 31, x9 Mar 31, x9 Before revaluation After revaluation For the first 3 months of 20x9 Before revaluation After revaluation b) Show all the journal entries related to this equipment during 20x9. Dec 31, x9 For the last 9 months of 20x9
- A tractor for over-the-road hauling is purchased for $90,000. It is expected to be of use to the company for 6 years, after which it will be salvaged for $4,000. Calculate the depreciation deduction and the unrecovered investment during each year of the tractor’s life using MACRS-GDS allowances. a. What is the MACRS-GDS property class? b. Assume the tractor is used for the full 6 years. c. Assume the tractor is sold during the 4th year of use. d. Assume the tractor is sold during the 3rd year of use.Wendt Corporation acquired a new depreciable asset for $94,000. The asset has a 4-year expected life and a residual value of zero. Required: Question Content Area 1. Prepare a depreciation schedule for all 4 years of the asset's expected life using the straight-line depreciation method. If an amount is zero, enter "0". Wendt CorporationStraight-Line Depreciation MethodFour Years End of Year Depreciation Expense Accumulated Depreciation Book Value $fill in the blank 6b806f009f9ffea_1 Year 1 $fill in the blank 6b806f009f9ffea_2 $fill in the blank 6b806f009f9ffea_3 fill in the blank 6b806f009f9ffea_4 Year 2 fill in the blank 6b806f009f9ffea_5 fill in the blank 6b806f009f9ffea_6 fill in the blank 6b806f009f9ffea_7 Year 3 fill in the blank 6b806f009f9ffea_8 fill in the blank 6b806f009f9ffea_9 fill in the blank 6b806f009f9ffea_10 Year 4 fill in the blank 6b806f009f9ffea_11 fill in the blank 6b806f009f9ffea_12 fill in the blank 6b806f009f9ffea_13…Solar Systems purchased two assets during the current year. On August 10, Solar Systems placed in service computer equipment (five year property) with a basis of $20,000 and on November 18 placed in service machinery (seven-year property) with a basis of $10,000. Calculate the maximum depreciation expense, ignoring Sect. 179 and bonus depreciation). Use your book's table 1. Type of asset Date in service Recovery period Cost basis Depreciation rate Depreciation expense Adjusted tax basis Year Computer equipment 8/10/Y1 5 year 20,000 Y1 Machinery 11/18/Y1 7 year 10,000 Y1