BP 2 Quiz 3 solution

# BP 2 Quiz 3 solution - 1. On April 1, 2008, the AJ...

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1. On April 1, 2008, the AJ Corporation purchased equipment for \$350,000.  The estimated service life of  the equipment is 7 years, and the estimated residual value is \$30,000.   Required :     sum-of-the-years’ digits method .  Partial-year  depreciation is calculated based on the number of months the asset is in service.  Please show  your work and round to the nearest dollar where necessary. (1 point ) n(n+1)  = 7(8)  = 28        Depreciable base = 350,000-30,000 = 320,000      2      2 2008: 320,000 x 7/28 x ¾ =  60,000 2009: 320,000 x 7/28 x ¼ =  20,000   320,000 x 6/28 x ¾ =  51,429           71,429                b. Assume AJ Corp changes their deprecation method in 2010 to  straight-line , and also changes the  salvage  value to \$20,000 and the estimated  total  service life to 8 years.  Calculate depreciation for  2010.   Round your answer to the nearest dollar.  (1 point) .5 if you put: 350,000 – (60,000 + 71, 429) – 20,000  =  31,771 198,571  = 33,095 6.25      6 2. On January 1, 2009, the Smalltime Delivery Company purchased a delivery truck for \$44,000.  At the  end of its 4 year service life, it is estimated that the truck will be worth \$8,000.   Required :  Calculate annual depreciation for the 4 year life of the truck using the

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## This note was uploaded on 04/08/2009 for the course ACG 3482C taught by Professor Tinaker during the Spring '09 term at University of Florida.

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BP 2 Quiz 3 solution - 1. On April 1, 2008, the AJ...

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