Accounting

ACT 500 Final Exam Review 1. P85. Req. 1 ?a. Straight-line: year| computer science| derogation expense| accrued Depreciation| NetBook order| At achievement| | | | $106,000| 1| ($106,000 - $2,000) x 1/13| $8,000| $ 8,000| 98,000| 2| ($106,000 - $2,000) x 1/13| $8,000| 16,000| 90,000| ?b. Units-of-production: ($106,000 $2,000) 200,000 = $0.52 per unit of output Year| numeration| Depreciation Expense| Accumulated Depreciation| NetBook Value| At acquisition| | | | $106,000| 1| $0.52 x 20,000 units| $10,400| $10,400| 95,600| 2| $0.52 x 16,000 units| 8,320| 18,720| 87,280| c. Double-declining-balance: Year| Computation| Depreciation Expense*| Accumulated Depreciation| NetBook Value| At acquisition| | | | $106,000| 1| ($106,000 - $0) x 2/13| $16,308| $16,308| 89,692| 2| ($106,000 - $16,308) x 2/13| 13,799| 30,107| 75,893| *Rounded to the warm dollar. Req. 2 silver flowFor tax purposes, the declining-balance (DB) method usually is viewed as desirable because an early tax deduction is preferable to a covert tax deduction. DB depreciation expense is highest; therefore, it yields pull take in taxable income and therefore depress income tax payable (and tear down cash outflow) in the early years. In subsequently years, this centre would reverse. Other than cash outflows for taxes, cash flows are unaffected by the method chosen by management for financial insurance coverage purposes. Companies may select different methods for tax and financial reporting. dogged asset turnoverThe DB method would be somewhat favorable for fixed asset turnover. Because this depreciation method yields the highest centre of attention of depreciation expense, it yields the lowest level of net fixed assets and hence the h ighest fixed asset turnover during the early! years. In later years, this effect...If you want to get a full essay, order it on our website: OrderEssay.net

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