9.docx - 9.2 9.4 9.5 9.8 and Problem 9.1A Moriah Sobeck 9.2 A c.e B r.e C r.e D c.e E r.e F c.e 9.4 1 Year first second third fourth fifth Six total

# 9.docx - 9.2 9.4 9.5 9.8 and Problem 9.1A Moriah Sobeck 9.2...

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9.2; 9.4; 9.5; 9.8 and Problem 9.1A Moriah Sobeck 9.2 A. c.e. B. r.e C. r.e. D. c.e. E. r.e. F. c.e. 9.4 1. Depreciation Schedule Straight line method with Half Year Convention Year Computation Depreciation expense Accumulated depreciation Book value 40,000 first 35,000 X 1/5 X 1/2 3,500 3,500 36,500 second 35,000 X 1/5 7,000 10,500 29,500 third 35,000 X1/5 7,000 17,500 22,500 fourth 35,000 X 1/5 7,000 24,500 15500 fifth 35,000 X 1/5 7,000 31,500 8500 Six 35,000 X 1/5 X 1/2 3,500 35,000 5000 total 35,000 Depreciation Schedule 200% declining balance Year Computation Depreciation expense Accumulated depreciation Book value 40,000 first 40,000X 40% 16,000 16,000 24,000 second 24000 X 40% 9,600 25,600 14,400 third 14,400 X 40% 5,760 31360 8,640 fourth 8,640 X 40% 3456 34,816 5,184 fifth 5,184 -5000

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Unformatted text preview: 184 35,000 5,000 total 35,000 b. the significant differences is the depreciation expense each year that changes. 9.5 A. No it is not violating the matching principle since company’s are allowed to use any number of methods. Depreciation is only an estimate B.to get lower income taxes which translates to increased cash avalibility. c. it would be more conservative in they way you are depreciating the asset at a higher value and trying to play it safe. 9.8 Estimated value of business as a whole : 2,800,000 Fair market value : 3,000,000 Estimated good will : 200,000 Investor should offer: 4,620,000 540000 X 3 + market value...
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• Spring '10
• chen

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