Acg 320

 Essay on Acg 320

Tennis balls and Bats, Inc. purchased equipment about January you, 2005, in a cost of $100, 000. The approximated useful a lot more 4 years with a salvage value of $10, 000.

With this assignment you are to full the following duties: В•Prepare two different devaluation schedules to get the equipment В– one using the double-declining stability method, and the other using the straight-line method. (Round to the nearest dollar). В•Determine which usually method would result in the greatest net income for the year closing December 23, 2005. В•How would income taxes affect management's choice among these two options for the financial statements?

1 . Straight-line Method

Depreciation expense sama dengan Acquisition expense В– recurring value

Estimated useful life in years

Depreciation expense annually 22, 500 = 100, 000 -- 10, 000 = 80, 000

4 four

Straight Line Depreciation

Yrs of the asset's lifeDepreciation


(income statement)Accumulated depreciation

(balance sheet by end with the year)Book value of the property

(balance linen at end of the year)

122, 50022, 50077, 500

222, 50045, 00055, 000

322, 50067, 50032, 500

422, 50090, 00010, 500

2 . Double-Declining Balance Devaluation

Downgrading expense sama dengan existing book value

Back button (2/estimated valuable life of years) 100, 000x2/4 sama dengan 50, 1000

Double-Declining Equilibrium Depreciation

Yrs of the asset's lifeDepreciation

Price = 50%Book value ahead of depreciating the asset to get the yearDepreciation expense to get the yearAccumulated depreciation (at the end with the year) 15. 5100, 00050, 00050, 1000

20. 550, 00025, 00075, 000

40. 525, 0012, 50087, 500

40. 512. 52. 590, 000

Using right line deprecation of 1 year means that twenty two, 500 (1*22, 500) have been added to the accumulated deprecation. The cost of the assets $22.99, 000 less $22, five-hundred, equal the book worth at the end of December 31, 2005, of $77, 500. Using the double declining technique deprecation of 1 year ensures that 2/4 and multiply this by annually...

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