Purchase Solution

Depreciation Schedule

Not what you're looking for?

Ask Custom Question

The White Pine Hotel has always depreciated its fixed assets using the straight-line method for both book and tax purposes. L.M. Tree, a newly hired tax consultant, has suggested this result in excessive taxes and has recommended the DDB method be used for future equipment purposes.

Planned equipment purposes for 20X2 and other relevant information are as follow:
Cost of equipment-------------------------------------$500000
Assumed purchase date-------------------------------1/1/X2
Salvage value------------------------------------------ -0-
Useful life-------------------------------------------- Four years
Marginal tax rate------------------------------------ 30%
Investment interest rate---------------------------- 10%

Assume: All "tax savings" for one year are invested at the beginning of the following year.
Required:
As a newly hired intern you have been requested to prepare a schedule proving the wisdom LM's advice.

Attachments
Purchase this Solution

Solution Summary

The solution explains how to prepare a depreciation schedule

Solution Preview

The White Pine Hotel has always depreciated its fixed assets using the straight-line method for both book and tax purposes. L.M. Tree, a newly hired tax consultant, has suggested this result in excessive taxes and has recommended the DDB method be used for future equipment purposes.

Planned equipment purposes for 20X2 and other relevant information are as follow:
Cost of equipment-------------------------------------$500000
Assumed purchase date-------------------------------1/1/X2
Salvage value------------------------------------------ -0-
Useful life-------------------------------------------- Four years
Marginal tax rate------------------------------------ 30%
Investment ...

Purchase this Solution


Free BrainMass Quizzes
Lean your Process

This quiz will help you understand the basic concepts of Lean.

Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.

Cost Concepts: Analyzing Costs in Managerial Accounting

This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.

Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.