2293 Chapter 8 Assign Solution 292[1]

# 2293 Chapter 8 - four years is the same under all of the methods c CCA in Year 1 \$100,000 x 40 x ½ = \$20,000 CCA in Year 2(\$100,000 \$20,000 x 40 =

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8-22 a) 1. Straight-line amortization [(\$100,000 - \$10,000) / 4] = \$22,500 per year 2. Production method amortization (\$100,000 - \$10,000) / 200,000 = \$0.45 per unit Year Units 2008 40,000 x 45¢ = \$18,000 2009 50,000 x 45¢ = \$22,500 2010 60,000 x 45¢ = \$27,000 2011 50,000 x 45¢ = \$22,500 3. Double-declining balance amortization Rate = (1/4) x 2 = 50% 2008 (\$100,000 - \$0) x 50% = \$50,000 2009 (\$100,000 - \$50,000) x 50% = \$25,000 2010 (\$100,000 - \$75,000) x 50% = \$12,500 2011 Book value = \$100,000-\$87,500 = \$12,500 Residual value 10,000 Amortization for Yr 4 \$ 2,500 b) Units of Double-Declining Straight-line Production Balance 1. Over 1 st 2 years \$45,000 \$40,500 \$75,500 2. Over all 4 years \$90,000 \$90,000 \$90,000 The double-declining-balance method records higher amortization expense during the first two years, but the total expense over all

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Unformatted text preview: four years is the same under all of the methods. c) CCA in Year 1 \$100,000 x 40% x ½ = \$20,000 CCA in Year 2 (\$100,000 - \$20,000) x 40% = \$32,000 8-28 a) Jul 1, 2004 DR Equipment 140,000 C R C a s h 140,000 Dec 31, 2004 DR Amortization 1 6,650 C R A c c . A m o r t i z a t i o n 6 , 6 5 1 (140,000 – 7,000) / 10 x = 13,300 per year x 6/12 = \$6,650 Dec 31, 2007 DR Amortization 2 11,750 CR Acc. Amortization 11,750 2 (140,000 – 6,650) – (2 x 13,300) – 1,000 / 9 = \$11,750 Nov 1, 2008 DR Amortization 3 9,792 CR Acc. Amortization 9,792 3 11,750 x 10/12 = 9,792 NBV = 140,000 – 6,650 – (2 x 13,300) – 11,750 – 9,792 = 85,208 Nov 1, 2008 DR Cash 83,000 DR Acc. Amortization 54,792 DR Loss on disposal 2,208 CR Equipment 140,000...
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## This note was uploaded on 09/25/2010 for the course FMGT FMGT 2293 taught by Professor Hamere. during the Summer '09 term at Langara.

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2293 Chapter 8 - four years is the same under all of the methods c CCA in Year 1 \$100,000 x 40 x ½ = \$20,000 CCA in Year 2(\$100,000 \$20,000 x 40 =

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