BUAD 305 HW7

BUAD 305 HW7 - 174,000 40% 69600 185600 2009 104,400 40%...

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BUAD 305 Homework7 BE 9-1 Land Cash price $50,000 Accrued taxes 5,000 Attirney's fees 2,100 Real estate broker's commission 2,800 Cost of land $59,900 BE 9-2 Truck Cash price $18,000 Sales taxes 1,080 Painting and lettering 1,200 Cost of Truck $20,280 P9 8-B a.) Straight- Line Method Depreciation per year = ($290,000 - $30,000)/5 =$52,000 Depreciation Rate = 100%/5= 20% Computation Annual End of Year Depreciable Depreciations Depreciation Accumulated Year Cost x Rate = Expense Depreciation 2007 $260,000 20% $52,000 $52,000 2008 260,000 20% 52000 104000 2009 260,000 20% 52000 156000 2010 260,000 20% 52000 208000 2011 260,000 20% 52000 260000 Total $260,000 Declining - Balance Method Computation Annual End of Year Depreciable Depreciations Depreciation Accumulated Year Cost x Rate = Expense Depreciation 2007 $290,000 40% $116,000 $116,000 2008
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Unformatted text preview: 174,000 40% 69600 185600 2009 104,400 40% 41760 227360 2010 62,640 40% 25056 252416 2011 37,584 40% 7,584 260000 Total $260,000 b.) Straight-line method would have a highter net income compare to Declining- balance me because of the lower depreciation expense in 2007. Stright-line and Declining-balance shou the same accumlated depreciation. c) Declining- balance method would have a lower net income compare to Straight-line met because of the higher depreciation expense in 2007. Stright-line and Declining-balance sho the same accumlated depreciation. Book Value $208,000 156,000 104,000 52,000 30,000 Book Value $174,000 104,400 62,640 37,584 30,000 ethod uld have thod ould have...
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BUAD 305 HW7 - 174,000 40% 69600 185600 2009 104,400 40%...

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