Accounting

ACT 500 Final Exam Review 1. P85. Req. 1 ?a. Straight-line: year| computer science| depreciation write off| stack away 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 exchange flowFor tax purposes, the declining-balance (DB) method usually is viewed as favored because an early tax deduction is preferable to a subterraneous tax deduction. DB depreciation expense is highest; therefore, it yields pull rase taxable income and therefore depress income tax payable (and set out cash outflow) in the early years. In later years, this 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 select differe nt methods for tax and financial reporting. ! heady asset turnoverThe DB method would be closely favorable for fixed asset turnover. Because this depreciation method yields the highest signification of depreciation expense, it yields the lowest level of net fixed assets and and so 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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