Accounting

ACT 500 Final Exam Review 1. P85. Req. 1 ?a. Straight-line: year| computer science| derogation outgo| amass Depreciation| NetBook order| At scholarship| | | | $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 funds flowFor tax purposes, the declining-balance (DB) method usually is viewed as pet because an early tax deduction is preferable to a posterior tax deduction. DB depreciation expense is highest; therefore, it yields pull coldcock taxable income and therefore depress income tax payable (and spurn cash outflow) in the early years. In after years, this essence would reverse. Other than cash outflows for taxes, cash flows are unaffected by the method chosen by management for financial reporting purposes. Companies may select different methods for tax and financi al reporting. immovable asset turnoverT! he DB method would be just about favorable for fixed asset turnover. Because this depreciation method yields the highest burden of depreciation expense, it yields the lowest level of net fixed assets and and then 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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