Accounting

ACT 500 Final Exam Review 1. P85. Req. 1 ?a. Straight-line: year| computer science| wear and tear outlay| store 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 property flowFor tax purposes, the declining-balance (DB) method usually is viewed as preferable because an early tax deduction is preferable to a covert tax deduction. DB depreciation expense is highest; therefore, it yields pull master taxable income and therefore depress income tax payable (and cast down cash outflow) in the early years. In ulterior years, this effect would reverse. Other than cash outflows for taxes, cash flows are unaffected by the method chosen by management for financial reportage purposes. Companies may select different methods for tax and financial reporting. refractory! asset turnoverThe DB method would be rough favorable for fixed asset turnover. Because this depreciation method yields the highest mall of depreciation expense, it yields the lowest level of net fixed assets and hence 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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