1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Vlad1618 [11]
3 years ago
5

An asset for drilling was purchased and placed in service by a petroleum production company. Its cost basis is $60,000, and it h

as an estimated market value of $12,000 at the end of an estimated useful life of 14 years. Compute the depreciation amount in the third year and book value at the end of the fifth year of life using SL method and 200% DB method with switchover to SL. Which method should the company use
Business
1 answer:
Vladimir [108]3 years ago
3 0

Answer:

purchase price $60,000

estimated useful life 14 years

residual value $12,000

depreciation expense using straight line method:

using straight line = ($60,000 - $12,000) / 14 = $3,428.57

depreciation during year 3 = $3,428.57

book value at end of year 5 = $60,000 - ($3,428.57 x 5) = $42,857.15

depreciation expense using SL method and 200% DB method with switchover to SL:

year 1 = $60,000 x 2 x 1/14 = $8,571.43

year 2 = $51,428.57 x 2 x 1/14 = $7,346.94

year 3 = $44,081.63 x 2 x 1/14 = $6,297.38

year 4 = $37,784.25 x 2 x 1/14 = $5,397.75

year 5 = $32,386.50 x 2 x 1/14 = $4,626.64

book value at end of year 5 = $27,759.86

Since the depreciation expense using double balance with switchover to straight line is higher during the first years, then the company should use that method. One extra dollar in depreciation expense = one less dollar in taxable income. It is usually better pay less taxes today than tomorrow.

You might be interested in
The cash used to make change when customers pay for their purchases in cash is an example of the _____ motive for holding cash.
PIT_PIT [208]

It should be noted that the cash that's used to make purchases as illustrated is the transactionary motive of holding money.

A financial transaction simply means an agreement that takes place between the buyer and the seller. It is the exchange of goods or services.

The transactionary motive of holding money simply means holding money in order to meet daily financial needs such as buying goods.

Read more about cash on:

brainly.com/question/25772299

8 0
2 years ago
Low-balling is a sales technique where the salesperson quotes a low price for a car to get you to make an offer, and negotiates
Daniel [21]
True, and it is very sneaky.  Please mark Brainliest!!!
3 0
4 years ago
Explain in your own words what a deposit is, no copying or pasting please.
Elena L [17]
a deposit is where you going to put money in the bank yeah like we just go put something in somewhere that's the definition of deposit .
6 0
3 years ago
Read 2 more answers
The reserve requirement is​ 10%. Suppose that the Fed ​$ worth of U.S. government securities a bond​ dealer, electronically the​
victus00 [196]

Answer:

D. The money supply decreases by ​$150,000.

Explanation:

Note: This question is not complete as some figures are omitted. The full question is therefore presented first before answering the question as follows:

The reserve requirement is​ 10%.

Suppose that the Fed sells ​$150,000 worth of U.S. government securities from a bond​ dealer, electronically debiting the​ dealer's deposit account at Reliable Bank.

Which of the following correctly describes the immediate effect of this transaction on the money​ supply?

A. The money supply decreases by ​$1,500,000

B. The money supply decreases by ​$135,000.

C. There is no change in the money supply.

D. The money supply decreases by ​$150,000.

E. None of the above.

The explanation to the answer is now provided as follows:

This is an example of Open market operations (OMO).

Open market operations (OMO) is a monetary policy strategy in which the central bank such as the Federal Reserve sells or purchases government securities in order to implement a particular monetary policy.

When the central bank sells government securities on the open market, it aims to reduce the money supply by the worth of the securities. This is called a contractionary monetary policy.

On the other hand, when the central bank purchases government securities on the open market, it aims to increase the money supply by the worh of the government securities. This is called an expansionary monetary policy.

From the question, the sale of ​$150,000 worth of U.S. government securities from a bond​ dealer is a contractionary monetary policy and it will reduce the money supply by exactly $150,000.

Therefore, the correct option is D. The money supply decreases by ​$150,000.

8 0
3 years ago
Greg, a project manager in your company, is falling behind on the project schedule. He has elected to crash the project. What is
Vinil7 [7]

Answer:

c) Adding additional project resources to the project

Explanation:

Falling behind schedule is something that needs to be avoided or dealt with promptly and systematically

Crashing is the technique to use when fast tracking has not saved enough time on the project schedule. You use crashing to save resources to the project for the least cost possible. Anyhow, crashing is expensive because more resources are added to the project.

References:

Dave. “A Step-by-Step Process of Dealing with a Project That Is Falling behind Schedule.” MyClientSpot Blog, 10 Sept. 2015

Monnappa, Avantika. “Project Management Learning Series: Fast Tracking Versus Crashing.” Simplilearn.com, Simplilearn, 27 Sept. 2019,

5 0
3 years ago
Other questions:
  • The Seller holds security deposits in the amount of $1,000 from each of six tenants. On the settlement sheet:
    9·1 answer
  • What does the limited liability of the owners of stock in a corporation mean?
    13·1 answer
  • How do vision and mission statements affect the strategic management process? Select an example of strong vision and mission sta
    15·1 answer
  • Whenever Claudia helps Dr. Stevens with his records, he manages to brush against her chest. She has spoken to her manager about
    11·1 answer
  • Set during the marketing research process, __________ are the specific, measurable goals the decision maker seeks to achieve in
    5·1 answer
  • Glassmaker has pre-merger $5 in debt and $10 in equity. Rate on debt is 11%. The risk free rate is 6%. The tax rate is 40% . The
    10·1 answer
  • Theresa, a cash basis taxpayer, purchased a bond on July 1, 2013, for $10,000, plus $400 of accrued interest. The bond paid $800
    11·1 answer
  • Phân tích điều kiện bản thân với tư cách là người chủ doanh nghiệp
    8·1 answer
  • A service contract for a video projection system costs $80 a year. You expect to use the system for six years. Instead of buying
    6·1 answer
  • A 5-year bond with a 10% coupon rate was purchased at $980 at issue and sold at $1020 by end of year 4. What is the investor's y
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!