ACC201 - Week7HW

ACC201 - Week7HW - Problem 08-01A TENESS CONSTRUCTION...

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Problem 08-01A TENESS CONSTRUCTION Schedule Estimated Market Percentage Apportioned Value of Total Cost Building $514,250 55% $495,000 «- Correct! Land 271,150 29% 261,000 «- Correct! Land Improvements 65,450 7% 63,000 «- Correct! Vehicles 84,150 9% 81,000 «- Correct! Totals $935,000 100% $900,000 «- Correct! (value/935000) 900000 X % TENESS CONSTRUCTION General Journal Trans. Date Account Titles no. Debit Credit Jan. 1 Building 495,000 Land 261,000 Land Improvements 63,000 Vehicles 81,000 Cash 900,000 «- Correct! Part 2: Straight-line depreciation on building = $31,000 «- Correct! (495000-30000)/15 Part 3: Double-declining-balance depreciation on land improvements = $25,200 «- Correct! (100% X 5) X 2 = 40% 40% X 63000 Part 4: Defend or refute this statement: Accelerated depreciation results in payment of less taxes of the asset's life. No, a company's goal when using accelerated depreciation is to simply postpone the tax payments, not try and lower them. All they are doing is reporting higher depreciation expenses at the beginning of an assets life
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This note was uploaded on 03/18/2011 for the course ACC 201 taught by Professor Pendarvis during the Spring '09 term at St. Leo.

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ACC201 - Week7HW - Problem 08-01A TENESS CONSTRUCTION...

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