112 fall 2006 ch 11 class discussion 9-24-07

112 fall 2006 ch 11 class discussion 9-24-07 - Class...

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Class discussion on depreciations policies Cost Salvage life S/L Date purchased 10000 0 10 years 1000 per year 5/15/2006 1000 8/12 mos. 666.67 Policy: Depreciate from the beginning of the month of purchase 1000 7/12 mos. 583.33 Policy: Depreciate from the beginning of the month following the month of purchase 1000 7 1/2 mos. 625 Policy: Depreciation from the date of purchase 1000 6/12 mos. 500 Policy: half year convention 1000 6/12 mos. 500 Policy: All assets purchased during the year are depreciated for half of a year 1000 12/12 mos. 1000 Policy: All assets purchased during the year are depreciated for a full year 1000 0/12 mos. 0 Policy: no depreciation is recorded in the year of purchased 1000 12/12 mos. 1000 Policy: All assets purchased before June 30, are depreciated for a full year Moral of the story? Policy determines the amount of depreciation taken in any one year
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DDB half year convention and change to straight line when it results in greater depreciation 100000 5 year life No salvage 1 100000 40% 40000 50% 20000 20.00% 2 80000 40% 32000 32.00% 3 48000 40% 19200 19.20% 4 28800 40% 11520 11.52% Test now 5 17280 11520 11.52% 5760 5760 5.76% 100000 Test
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This note was uploaded on 04/17/2008 for the course ACCY 112 taught by Professor Beirne during the Spring '07 term at CSU Sacramento.

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112 fall 2006 ch 11 class discussion 9-24-07 - Class...

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