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vampirchik [111]
3 years ago
7

Depreciation SchedulesDunn Corporation acquired a newr depreciable asset for $135,000. Theasset has a 5-year expected life and a

residual value of zero.Required:1. Prepare a depreciation schedule for all 5 years of the asset’s expectedlife using the straight-line depreciation method.2. Prepare a depreciation schedule for all 5 years of the asset’s expectedlife using the double-declining-balance depreciation method.3. CONCEPTUAL CONNECTION What questions should be asked aboutthis asset to decide which depreciation method to use?
Business
1 answer:
Scilla [17]3 years ago
7 0

Answer with explanation:

Part 1. Straight-line depreciation can be calculated using the following formula:

Straight-line depreciation = (Cost of Asset - Residual Value) / Useful Life

Now by putting the values of each parameter, we have:

Straight-line depreciation = ($135,000 - Zero) / 5years = $27,000

So this depreciation will be charged to the asset to remainder of its life.

Part 2. We can calculate depreciation using double declining balance method whose formula is as under:

Double Declining Balance Depreciation = 2 X Cost of the asset/Useful Life

By putting values, we have:

Double Declining Balance Depreciation = 2 * $135,000 / 5 Years = $54,000

The depreciation would be charged each year unless it fells below the salvage value of the asset, which in this question is given and is zero.

Part 3.

Following are the main questions that we must consider before opting to any depreciation method:

  1. Does the cost of the asset chosen is accurate and in-accordance to International Financial Reporting Standards.
  2. Does the estimated Residual value of the asset is forecasted accurately. International accounting standard IAS 16 says that the scrap value must be discounted and its present value must be considered as a scrap value.
  3. Is the useful life of the asset estimated is in-accordance to the pace of technological advances?
  4. The asset's fair value must be considered each year to analyze whether or not the asset value in the market is aligned with our carrying value calculated or not.

So these were the factors which decides which method of depreciation must be opted or what estimate changes are required in calculating the fair value of the asset.

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1 year ago
Cloud nine, by caryl churchill, and the laramie project, by moises kaufman, are examples of a contemporary trend in which
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<u>Answer:</u>

<em>Cloud nine, by caryl churchill, and the laramie project, by moises kaufman, are examples of a contemporary trend in Political Sense.</em>

<u>Explanation:</u>

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7 0
3 years ago
Mariposa Inc is considering improving its production process by acquiring a new machine. There are two machines management is an
kondor19780726 [428]

Answer:

Machine B should be purchased because it has a lower equivalent annual cost

Explanation:

To determine the better of the two options, we would compare the equivalent annual cost of each options using a discount rate of 14% per annum

Equivalent annual cost = Total PV of cost /Annuity factor

Total PV of cost = Initial cost + PV of annual operating cost

PV of annual operating cost= Annual operating cost × Annuity factor

Annuity factor = (1- (1+r)^(-n))/r

r- rate , n- years

Machine A

PV of annual operating cost = 8,000 × (1- 1.14^(-3)/0.14= 18573.05622

PV of total cost = 290,000 +18573.05622 =  308,573.06  

Uniform Annual cost =  308,573.06 /2.321632027 =  132,912.13  

Equivalent annual cost = $132,912.13

Machine B

PV of annual operating cost = 12,000 × (1- 1.14^(-2)/0.14= 19759.92613

PV of total cost = 180,000   + 19759.92613 =  199,759.93  

Equivalent annual cost =  199,759.93 /1.6466=$121,312.15  

Equivalent annual cost = $121,312.15

Machine B should be purchased because it has a lower equivalent annual cost

Total PV of cost

6 0
2 years ago
Whether a business makes a profit or loss is determined by the difference between the total amount of money a business takes in,
elena55 [62]

Answer:

Revenue/Income; Expenses

Explanation:

Profit or Loss is determined as the difference between the revenue made by a business (also known as its income), and the expenses spent in the process of generating that revenue.

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If the difference is positive, the outcome is a profit. If the difference is negative, the outcome is a loss.

5 0
3 years ago
Mr. Smith decides to feed his pet Doberman pinscher a combination of two dog foods. Each can of brand A contains units of​ prote
m_a_m_a [10]

Answer:

hello your question is incomplete below is the complete question

Mr. Smith decides to feed his pet Doberman pinscher a combination of two dog foods. Each can of brand A contains 3 units of protein, 1 unit of carbohydrates, and 2 units of fat and costs 80 cents. Each can of brand B contains 1 unit of protein, 1 unit of carbohydrates, and 6 units of fat and costs 50 cents. Mr. Smith feels that each day his dog should have at least 6 units of protein, 4 units of carbohydrates, and 12 units of fat. How many cans of each dog food should he give to his dog each day to provide the minimum requirements at the least cost? *Mr. Smith should give his dog ___ can(s) of brand A and ___ can(s) of brand B

<em>answer</em> : 1.5 cans of brand A and 1.5 cans of brand B

Explanation:

<u>Food A contains </u>:

3 units of protein , 1 unit of carbohydrates, 2 units of fat

cost of food A = 80 cents

<u>Food B contains :</u>

1 unit of protein , 1 unit of carbohydrates, 6 units of fat

cost of food B = 50 cents

<u>minimum ingredients required in the dog food daily </u>

6 units of protein , 4 units of carbohydrates, 12 units of fat

<em />

<em>In order to achieve the minimum/least cost of 195 cent. Mr. smith should give his dog 1.5 cans of Brand A and 1.5 can of brand B</em>

attached below is the detailed solution

7 0
3 years ago
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