Accounting

ACT 500 Final Exam Review 1. P85. Req. 1 ?a. Straight-line: year| computer science| depreciation expense| collect Depreciation| NetBook order| At learnedness| | | | $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 cash in flowFor tax purposes, the declining-balance (DB) method usually is viewed as desirable because an early tax deduction is preferable to a subsequently(a) tax deduction. DB depreciation expense is highest; therefore, it yields pull downward(a) taxable income and therefore depress income tax payable (and dishonor cash outflow) in the early years. In later years, this lens nucleus 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 selec t different methods for tax and financial re! porting. obstinate asset turnoverThe DB method would be somewhat favorable for fixed asset turnover. Because this depreciation method yields the highest amount of depreciation expense, it yields the lowest level of net fixed assets and indeed the highest 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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