Explore BrainMass


Capital Expenditure for Tertiary Care Hospital

See the attached file. You are the CFO of a 720-bed tertiary care hospital. You have been presented with a capital expenditure request for a state-of-the-art MRI machine to be purchased on 01-01-09 for a cost of $1,250,000 with a useful life of 6 years and an expected salvage value of $35,000. Calculate depreciation fo

Depreciation in Tax and Stockholder Reporting

For 2007, Rico Metals reported $9000 of sales, $6000 of operating costs other than depreciation and $1500 of depreciation. The company had no amortization charges, it had issued $4000 of bonds that carry a 7% interest rate and its federal-plus-state income tax rate was 26%. 2008 data are expected to remain unchanged except for o

Depreciation for partial periods: Boris Becker, Inc

Need Help with following problem: The cost of equipment purchased by Boris Becker, Inc., on June 1, 2007 is $67,000. It is estimated that the machine will have a $4,000 salvage value at the end of its service life. Its service life is estimated at 7 years; its total working hours are estimated at 42,000 and its total product

Depreciation True or False

The cost of a depreciable asset less accumulated depreciation reflects the book value of the asset. True or False The safeguarding of assets is an objective of a company's system of internal control. True or False Accounts receivable are one of a company's least liquid assets. True or False The direct write-off method

Depreciation of Costs of Goods

Use the following information for questions 26 through 30. The following data are provided: December 31 2008 2007 Cash $ 375,000 $ 250,000 Accounts receivable (net) 400,000 300,000 Inventories 650,000 550,000 Plant assets (net) 2,000,000 1,625,000 Accounts payable 275,000 200,000 Taxes

Depreciation Computations: Five Methods

Jon Seceda Furnace Corp. purchased machinery for $315,000 on May 1, 2007. It is estimated that it will have a useful life of 10 years, salvage value of $15,000, production of 250,000 units, and working hours of 25,000. During 2008 Seceda Corp. uses the machinery for 2,650 hours, and the machinery produces 25,500 units. From

Depreciation for Fractional Years

On August 3, Srini Construction purchased special purpose equipment at a cost of $1,000,000. The useful life of the equipment was estimated to be 8 years, with a residual value of $50,000. a) Compute the depreciation expense to be recognized each calendar year for financial reporting purposes under the straight-line depreciati

A high-speed multiple-bit drill press costing $300,000 has an estimated salvage value of $25,000 and a life of ten years. What is the annual depreciation for each of the first two full years under

I need help with these questions. Depreciation Methods. A high-speed multiple-bit drill press costing $300,000 has an estimated salvage value of $25,000 and a life of ten years. What is the annual depreciation for each of the first two full years under the following depreciation methods? 1. Double-declining-balance metho

Straight line depreciation

Fundamental Accounting Principals, 18th Edition Wild, Larson, Chiappetta, McGraw-Hill Irwin Problem 10-1B: Plant asset costs; depreciation methods. Nagy Company negotiates a lump-sum purchase of several assets from a contractor who is relocating. The purchase is completed on January1, 2008, at a total cash price of $1,80

Depreciation Methods

A high-speed multiple-bit drill press costing $300,000 has an estimated salvage value of $30,000 and a life of ten years. What is the annual depreciation FOR THE SECOND YEAR OF USE under the following depreciation methods? 1. Double-declining-balance method: 2. Units of production (activity) method (lifetime output is est

Depreciation: record no expense for 2008 - Evaluate argument

The managements of two different companies argue that because of specific conditions in their companies, recording depreciation expense should be suspended for 2008. Evaluate carefully their arguments. (a) The president of Guzman Co. recommends that no depreciation be recorded for 2008 because the depreciation rate is 5% per

Atwater Manufacturing: Compare three methods of depreciation for new machine

Atwater Manufacturing Company purchased a new machine especially built to perform one particular function on the assembly line. A difference of opinion has arisen as to the method of depreciation to be used in connection with this machine. Three methods are now being considered. (a) The straight-line method (b) The produ

Depreciation-Replacement, Change in estimate

Greg Maddox Company constructed a building at a cost of $2,200,000 and occupied it beginning in January 1988. It was estimated at that time that its life would be 40 years, with no salvage value. In January 2008, a new roof was installed at a cost of $300,000, and it was estimated then that the building would have a useful

Different Methods of Depreciation - Jackel Industries

Jackel Industries presents you with the following information Acc Dep Date Salvage Life in Depreciation To Depreciation Description Purchased Cost Value Years Method 12/31/2007 for 2008 Machine A 2/12/2006 142500 16000 10 (a) 33350 (b) Machine B 8/15/2005 (c) 21000 5 SL 29000 (d) Machine C 7/21/2004

Calculate cash flow and depreciation: Menendez Corporation

3-7 The Menendez Corporation expects to have sales of twelve million. Costs other than depreciation are expected to be 75% of sales, and depreciation is expected to be 1.5 million. All sales revenues will be collected in cash and costs other than depreciation must be paid off during the year. Menendez federal plus state ta

Depreciation Calculation methods

Depreciation calculation methods. Hill Co. acquired a new delivery truck at the beginning of its current fiscal year. The following information is available cost $ 100,000 estimated useful life 6 years estimated salvage value $ 7,000 Required: a. C

Depreciation by straight line method

1 have trouble figuring out theses two problems dealing with depreciated by straight line method. 1) Equipment cost of $120,000 has a estimated residual value of $10,000 and a estimated life of 5yrs or 12,000hrs. It is to be depreciated by the straight line method. What is the amount of depreciation for the first full year du

Taxation topics: AMT, deductions, casualty, like kind exchange, depreciation

1. When a state decouples from a Federal tax provision, it means that this provision will not apply for state income tax purposes. Answer: True or False 2. For a person who is in the 35% marginal tax bracket, $1,000 of tax-exempt income and $1,538 [$1,000/(1 - .35)] of taxable income yield the same after-tax income. Answer: T

Straight-line, Sum of Year, Double Declining

On July 1, 2006, Nyland Company purchased for $2,160,000 snow-making equipment having an estimated useful life of 5 years with an estimated salvage value of $90,000. Depreciation is taken for the portion of the year the asset is used. Determine the depreciation expense and year-end book values for 2006 and 2007 using the Sum

Depreciation Calculation: Change in Useful Life and Salvage Value

Machinery purchased for $60,000 by Tom Brady Co. in 2003 (Joe Montana Co. in 2000) was originally estimated to have a life of 8 years with a salvage value of $4,000 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2008, it is determined that the total estimated life should be 10 years with a s

Straight Line Methods of Depreciation

An asset was purchased for $60,000 and originally estimated to have a useful life of 10 years with a residual value of $3,000. After two years of straight line depreciation, it was determined that the remaining useful life of the asset was only 2 years with a residual value of $2,000. Calculate this year's depreciation using t

Adjustment of Depreciable Base of a truc which was overhauled.

A truck was acquired on July 1, 2004 at a cost of $270,000. The truck had a six-year useful life and an estimated salvage value of $30,000. The straight-line method of depreciation was used. On January 1, 2007, the truck was overhauled at a cost of $25,000, which extended the useful life of the truck for an additional two

Depreciation expense deductions & Realized and Recognized gains/losses

Sam Johnson started a small machine shop, Machines, Inc., in his garage and incorporated it in March of 2002 as a calendar-year corporation. At that time, he began using his personal computer and tools solely for the business as part of his contribution to the corporation. The computer cost $2,700 but had a fair market value of

Depreciation Schedule: Balls and Bats, Inc.

Balls and Bats, Inc. purchased equipment on January 1, 2005, at a cost of $100,000. The estimated useful life is 4 years with a salvage value of $10,000. 1. Prepare two different depreciation schedules for the equipment - one using the double-declining balance method, and the other using the straight-line method. (Round to

The Lancaster Corporation purchased a piece of equipment three years ago for $250,000. It has an asset depreciation range (ADR) midpoint of eight years. The old equipment can be sold for $97,920.

Replacement decision analyzed by using a total analysis of both the old and new machines or by using an incremental analysis that emphasizes the changes in cash flows between the old and the new machines. PROBLEM The Lancaster Corporation purchased a piece of equipment three years ago for $250,000. It has an asset depreciati

Gates Corporation's accumulated depreciation

Gates Corporation's accumulated depreciation-equipment increased by $8,000, while patents decreased by $5,200 between balance sheet dates. There were no purchases or sales of depreciable or intangible assets during the year. In addition the income statement showed a loss of $6,000 from the sale of investments. Reconcile a net

Combined Depreciation

6. Answer_____________ Michelle has an advertising business that she reports on Schedule C of her personal tax return. On May 1, 2006, Michelle purchased a Toyota Camry for $22,000. She purchased a copier for $30,000 on October 15th and office furniture for $50,000 on November 1st. All assets acquired are new. The Camry is used