1. A company has decided to improve their Engineering Department . The president
ID: 2710933 • Letter: 1
Question
1. A company has decided to improve their Engineering Department. The president asked you, as the design engineer, to analyze and compare the difference between STRAIGHTLINE, MACRS and DDB in a tabular form using spreadsheet. Base= 200,000
Salvage value= % of B is 8 Life, year is 7
1. A company has decided to improve their Engineering Department. The president asked you, as the design engineer, to analyze and compare the difference between STRAIGHTLINE, MACRS and DDB in a tabular form using spreadsheet. Base= 200,000
Salvage value= % of B is 8 Life, year is 7
1. A company has decided to improve their Engineering Department. The president asked you, as the design engineer, to analyze and compare the difference between STRAIGHTLINE, MACRS and DDB in a tabular form using spreadsheet. Base= 200,000
Salvage value= % of B is 8 Life, year is 7
Explanation / Answer
Straightline method Base value 200000 salvage value @ 8% 16000 Depreciable value 184000 Depreciatoin per annum 26285.7143 Rate 14.29% Straightline method Year Opening Depreciation Closing 1 2,00,000.00 26,285.71 1,73,714.29 2 1,73,714.29 26,285.71 1,47,428.57 3 1,47,428.57 26,285.71 1,21,142.86 4 1,21,142.86 26,285.71 94,857.14 5 94,857.14 26,285.71 68,571.43 6 68,571.43 26,285.71 42,285.71 7 42,285.71 26,285.71 16,000.00 Modified accellerated cost recovery system(General depreciation) Since asset life is 7 years we will use half year convention for straightline method of depreciation Year Opening Depreciation Value Rate ( Derived) 0 2,00,000.00 14,285.71 1,85,714.29 7.14% 1 1,85,714.29 28,571.43 1,57,142.86 14.29% 2 1,57,142.86 28,571.43 1,28,571.43 14.29% 3 1,28,571.43 28,571.43 1,00,000.00 14.29% 4 1,00,000.00 28,571.43 71,428.57 14.29% 5 71,428.57 28,571.43 42,857.14 14.29% 6 42,857.14 28,571.43 14,285.71 14.29% 7 14,285.71 14,285.71 -0.00 7.14% Modified accellerated cost recovery system(General depreciation) Since asset life is 7 years we will use half year convention for 200% db factor Year Opening Rate as per IRS Depreciation Value 1 2,00,000.00 14.29% 28580 1,71,420.00 2 1,71,420.00 24.49% 48980 1,22,440.00 3 1,22,440.00 17.49% 34980 87,460.00 4 87,460.00 12.49% 24980 62,480.00 5 62,480.00 8.93% 17860 44,620.00 6 44,620.00 8.92% 17840 26,780.00 7 26,780.00 8.93% 17860 8,920.00 8 8,920.00 4.46% 8920 - Double declining balance of depreciation Year Opening Depreciable value Rate Double rate Depreciation Value Total Block(Including salvage) 1 1,84,000.00 14.29% 28.58% 52,587.20 1,31,412.80 1,47,412.80 2 1,31,412.80 14.29% 28.58% 37,557.78 93,855.02 1,09,855.02 3 93,855.02 14.29% 28.58% 26,823.77 67,031.26 83,031.26 4 67,031.26 14.29% 28.58% 19,157.53 47,873.72 63,873.72 5 47,873.72 14.29% 28.58% 13,682.31 34,191.41 50,191.41 6 34,191.41 14.29% 28.58% 9,771.91 24,419.51 40,419.51 7 24,419.51 14.29% 28.58% 6,979.10 17,440.41 33,440.41 8 17,440.41 14.29% 28.58% 4,984.47 12,455.94 28,455.94
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