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Helen [10]
3 years ago
14

At the beginning of 2016, robotics inc. acquired a manufacturing facility for $12 million. $9 million of the purchase price was

allocated to the building. depreciation for 2016 and 2017 was calculated using the straight-line method, a 25-year useful life, and a $1 million residual value. in 2018, the company switched to the double-declining-balance depreciation method. what is depreciation on the building for 2018
Business
1 answer:
Serhud [2]3 years ago
7 0

Answer:

$667,826

Explanation:

Straight Line depreciation is a method of depreciation in which the cost of the asset net of residual value is divided over useful life.

As per given data

Cost of building = $9,000,000

Residual Value = $1,000,000

Useful life = 25 years

Depreciation per year = ($9,000,000 - $1,000,000 ) / 25 years = $320,000

Net Book Value at beginning of 2018 = $9,000,000 - $320,000 = $8,680,000

Switched to Double Declining Method

In double declining method the double depreciation is charged on the asset's book value at the beginning of the year. The Depreciation is accelerated in this method.

Depreciation for 2018 = 2 x (Asset's book value at the beginning of the year - Salvage Value ) / Numbers of Useful life remaining

Depreciation for 2018 = 2 x ($8,680,000 - $1,000,000 ) / (25 - 2)

Depreciation for 2018 = 2 x ($8,680,000 - $1,000,000 ) / (25 - 2)

Depreciation for 2018 = $667,826

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Select the correct answer.
Lana71 [14]

Answer:

B-section 404

Explanation:

it is registered as 404

6 0
3 years ago
Use the following method to calculate the yearly depreciation allowances and book values for a firm that has purchased $150,000
Dafna1 [17]

Answer:

a. Straight Line Method Depreciation= $ 2400

b. MACRS

c. Sum-of-Years' Digits

Explanation:

a. Straight Line Method Depreciation=

Purchase Cost- Salvage Value/ No of useful life *depreciation rate

=$ 150,000- $30,000/10 * 20%

=120,000/10* 20%= 12000* 20/100=$ 2400

b. MACRS

Since it is a non-form 10-year property, the company can elect to use either the 150% or 200% declining balance method.

Depreciation in 1st Year = Cost × 1/Useful Life × A × Depreciation Convention

Depreciation in Subsequent Years =

(Cost − Depreciation in Previous Years) × 1/ Recovery Period × A

Where,

A is 100% or 150% or 200%.

Depreciation for the the first year $ 150,000/10 *200%= $30,000

Depreciation for the the 2nd year =$ 150,000-30,000/10 *200%= $24,000

Depreciation for the the third year =$ 150,000-30,000- 24000/10 *200%

=$ 19,200

Depreciation for the the 4th year $ 150,000-30,000-24000-19200/10 *200%=  Note A

Note A: MACRS declining balance changes to straight-line method when that method provides an equal or greater deduction. Deduction under 200% declining balance MACRS for 4th year  would be $ 153,600 ($150000 - $30,000 - $24000 - $19200  × 1/10 × 200%. This is greater than depreciation under straight line method .

c. Sum-of-Years' Digits Method Depreciation

Depreciation Amount = Acquisition Cost - Salvage Value = $ 120,000

Sum of useful life= 10+9+8+7+6+5+4+3+2+1= 55

Depreciation Factor = 10/55, 9/55, 8/55, 7/55 etc.

Depreciation for the 1st year= 10/55* 120,000= $ 21,818.2

Depreciation for the 2nd year= 9/55* 120,000= $ 19 636.4

Depreciation for the 3rd year= 8/55* 120,000=  $17,546

Depreciation for the 4th year= 7/55* 120,000=  $ 15,273

Depreciation for the 5th year= 6/55* 120,000= $ 13,091

Depreciation for the 6th year= 5/55* 120,000= $ 10,909.1

Depreciation for the 7th year= 4/55* 120,000= $ 8727.3

Depreciation for the 8th year= 3/55* 120,000=  $ 6545.5

Depreciation for the 9th year= 2/55* 120,000=  $4363.63

Depreciation for the 10th year= 1/55* 120,000= $ 2181.81

3 0
3 years ago
The Fashion Shoe Company operates a chain of women's shoe shops around the country. The shops carry many styles of shoes that ar
timofeeve [1]

The computation of the break-even point (in units) is given below:

Break-eventpoint = Fixed cost / contribution margin.

= Fixed cost / (selling price -  variable cost)

= $158,000/ ($20-%10)

= $158,000/ $10

= %15,800 units.

The break-even point (in units) for Shop 48 is 15,800 units. It can be computed by dividing the amount of fixed cost by the amount of per unit contribution margin. And the per unit contribution margin can be computed by deducting the variable cost per unit from the selling price per unit.

The break-even point is the point at which total costs equal total sales, and there is no loss or profit for a small business.

Learn more about the break-even point at

brainly.com/question/9212451

#SPJ4

4 0
1 year ago
Christine is an unemployed stenographer who cannot find work in Florida. There are several companies hiring stenographers in New
DiKsa [7]

Answer:

Option (b) is correct.

Explanation:

Cyclical unemployment refers to the unemployment that occured because of the fall in the demand for goods and services in an economy. It is largely affected by the fluctuations in economic growth of a country. When the overall demand for goods and services are not matched with the full employment in an economy. This unemployment is mostly occured when the economy of a country is contracting.

8 0
3 years ago
In contract and procurement management, data rights means: Select one:
klemol [59]
The answer is exactly b
6 0
3 years ago
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