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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