1. Based on the first 3 year accumulated depreciation values which method should
ID: 2521277 • Letter: 1
Question
1. Based on the first 3 year accumulated depreciation values which method should be selected for purposes? Why?2. What is the book value for each method at the end of the recovery period ?
3. Which method has a salvage value that has been met at the end of the recovery period? Depreciation SL Depreciation MACRS 5 year Depreciation DDB Depreciation early Depreciat ion calculate Ited earty Yearly Depreciat ion on Year End Year on on Year End Depreciat depreciablBook Depreciat Purchase Book Depreciat d on book Deprectai Year End ionRate e value Value ion Rate cost Value ion Rate value Book Value Base Value 19600 | 78400 | 40% 39200 39200 20% 1862080164 0.2 58800 alvage @9% of Base- 20% 18620 62328 0.32 31360 47040 40% 23520 62720 35280 882 20% 18620 4440.192 18816 28224 14112 76832 21168 ble value Useful Life : 20% 18620 | 26656 | 0.1152 | 11289.6 | 16934.4 | 40% | 8467.2 | 85299.2 12700.8 0.09 depreciati on rate 20% 18620 8820 0.1152 | 112896 5644.8 40% | 508032 | 9037952 762048 depreciati on rate 20% 0.057656448
Explanation / Answer
Requirement 1
DDB depreciation method should be followed as is allows the company to charge more depreciation to profit and loss account which will result in lower taxes.
Requirement 2
Requirement 3
SLM depreciation method has a salvage value that has been et at the end of the recovery period.
SLM MACRS 5 Year DDB Accumulated Depreciation $55,860 $69,776 $1,15,248Related Questions
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