FINAL EXAM/Fall 2016 Question # Explain briefly the main (5 marks) (a) We discus

Question

FINAL EXAM/Fall 2016 Question # Explain briefly the main (5 marks) (a) We discussed in the class techniques to enhance the employees' motivation. concept of Maslow Hierarchy Need Model. (b) An asset has a fixed cost of S12,000, a recovery period of 8 years, and an estimated salvage value of adepreciation schedule that shows the depreciation amount and the book value over the $2000 first 4 years i.Using the straight line (SL) method; and ii. Using double Declining Balance (DDB) method. 3 marks) ili As an owner of this asset, which method do you prefer for tax purposes? (5 marks) (2 marks) Answer

Explanation / Answer

Requirement a:

Maslow Hierarchy Need Model:

It is in the form of pyramid having fundamental needs at bottom and self-actualization at the top.

Needs from bottom:

Physiological

Safety

Love / belonging

Esteem

Self Actualisation

Requirement b(i):

Depreciation under straight line method:

Depreciation per annum = (Cost-salvage value) / Useful life

= (12000-2000) / 8

= 10000/8

=$1250

Requirement b(ii):

Depreciation under Double Declining Balance Method:

Depreciation Rate = (1/Useful life) * 2 = (1/8)*2 = 25%

Requirement b(iii):

Accelerated Methods of depreciation are preferred for tax purposes. Hence double declining balance method of depreciation is preferred.

Year Beginning Book Value Depreciation Ending Book Value 1 12000 1250 10750 2 10750 1250 9500 3 9500 1250 8250 4 8250 1250 7000

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