7 year depreciation on equipment
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The new equipment will cost $250,000. Installation and transportation costs aggregating $25,000 will be capitalized. The appropriate five year depreciation schedule (20%, 32%, 19%, 14.5%, 14.5%) will be employed with no terminal value factored into the computations. Annual incremental pre-tax cash inflows are estimated at. $75,000.
[DOC File]Chapter 7: Net Present Value and Capital Budgeting
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7.7 Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 1. Annual Salary Savings $120,000 $120,000 $120,000 $120,000 $120,000 2. Depreciation 100,000 100,000 100,000 100,000 100,000 3.
[DOC File]Chapter 1 Test Bank - CPA Diary
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The gain on equipment relates to equipment with a book value of $85,000 and a 7-year remaining useful life that Quail sold to Savannah for $120,000 on January 2, 2005. The straight-line depreciation method was used.
[DOC File]Chapter 11 Depreciation
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Equipment was purchased 1/1/2002. In 2003, Big Steel used the equipment 3,000 hours. How much depreciation on this equipment should they recognize for 2003? $240,000 / 10 = $24,000 (each year for 10 years) Accelerated Depreciation Methods (aka Decreasing-Charge methods) These methods take more depreciation in the early years of an asset’s life.
[DOC File]Chapter 12
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49. Wombles Corporation is contemplating purchasing equipment that would increase sales revenues by $478,000 per year and cash operating expenses by $249,000 per year. The equipment would cost $738,000 and have a 9 year life with no salvage value. The annual depreciation would be $82,000. The simple rate of return on the investment is closest to:
[DOC File]Tax Depreciation (MACRS) Methods
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7-year property. Office furniture and fixtures, and any property that has not been designated as belonging to another class. 10-year property. Vessels, barges, tugs, similar water transportation equipment, single-purpose agricultural or horticultural structures, and trees or vines bearing fruit or nuts. 15-year property
[DOC File]Rubric 3A 3 - Mrs. Sodhi
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For the same equipment, prepare a schedule of depreciation for the first five years using the declining-balance method. Canada Revenue Agency’s prescribed rate for depreciation is 30%. Year Declining Balance Depreciation Balance $50 000.00 1 $15 000.00 35 000.00 2 10 500.00 24 500.00 3 7 350.00 17 150.00 4 5 145.00 12 005.00 5 3 601.50 8 403 ...
[DOCX File]Practice Exam Chapters 1 - 4 seventh
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Fryer Inc. owns equipment for which it paid $90 million. At the end of the current year, it had accumulated depreciation on the equipment of $27 million. Due to adverse economic conditions, Fryer's management determined that it should assess whether an impairment loss should be recognized for the equipment.
[DOC File]FIRST PRINCIPLES OF VALUATION - University of North Florida
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Depreciation rate: ACRS; 7 year property (see note about depreciation) Equipment salvage value: 20% or $160,000 in year 8. Note: ACRS refers to the Accelerated Cost Recovery System. ACRS places assets into one of six classes each of which has an assumed life, ranging from 3-20 years, with a designated depreciation rate for each year. Since ...
[DOC File]Chapter 13 Property, Plant, and Equipment: Depreciation ...
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A. Select items of equipment from the accounting records and then attempt to locate them during the plant tour. B. Compare depreciation expense with the prior year's depreciation expense. C. Trace equipment items observed during the plant tour to the equipment subsidiary ledger. D. Scan the general journal for unusual equipment retirements.
[DOC File]Chapter 01 Quiz A - National Dong Hwa University
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You just purchased some new equipment costing $459,000. The equipment is classified as 7-year property for . MACRS. What is the total accumulated depreciation expense at the end of year 2? MACRS 7-year property ... 7. d Annual depreciation = $180,000 / 4 = $45,000. Tax = $120,500 ( .34 = $40,970. Total project cash flow at the end of year 4 ...
[DOC File]Chapter 7: Net Present Value and Capital Budgeting
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7.25 Bridgton Golf Academy is evaluating different golf practice equipment. The “Dimple-Max” equipment costs $45,000, has a three-year life, and costs $5,000 per year to operate. The relevant discount rate is 12 percent. Assume that the straight-line depreciation method is used and that the equipment is fully depreciated to zero.
[DOC File]ANSWERS TO QUESTIONS
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New carrying amount $4,800,000 Useful life 4 years Depreciation per year $1,200,000 (c) No entry necessary. Restoration of any impairment loss is not permitted. EXERCISE 11-17 (15–20 minutes) (a) Loss on Impairment 3,220,000 Accumulated Depreciation—Equipment 3,220,000
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