ProblemSet6 - Chapter 7 Plant Assets and Intangibles (5-10...

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Chapter 7 Plant Assets and Intangibles (5-10 min.) E 7-15 Land: $150,000 + $150,000 + $2,000 + $2,500 + $6,000 = $310,500 Land improvements: $65,000 + $10,400 + $6,000 = $81,400 Building: $50,000 + $1,000,000 = $1,050,000 (15-20 min.) E 7-19 Year Straight-Line Units-of- Production Double-Declining- Balance 20X1 $ 3,000 $ 4,080 $ 7,500 20X2 3,000 3,360 3,750 20X3 3,000 2,160 750 20X4 3,000 2,400 -0- $12,000 $12,000 $12,000 _____ Computations: Straight-line: ($15,000 $3,000) ÷ 4 = $3,000 per year. Units-of-production: ($15,000 $3,000) ÷ 100,000 miles = $.12 per mile; 20X1 34,000 × $.12 = $4,080 20X2 28,000 × .12 = 3,360
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20X3 18,000 × .12 = 2,160 20X4 20,000 × .12 = 2,400 Double-declining-balance — Twice the straight-line rate: 1/4 × 2 = 2/4 = 50% 20X1 $15,000 × .50 = $7,500 20X2 ($15,000 $7,500) × .50 = $3,750 20X3 $7,500 $3,750 = $3,750 residual value of $3,000 = $750 The units-of production method tracks the wear and tear on the van most closely. For income tax purposes, the
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This note was uploaded on 04/22/2011 for the course ECON 1001 taught by Professor Puller during the Spring '11 term at Georgia Institute of Technology.

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ProblemSet6 - Chapter 7 Plant Assets and Intangibles (5-10...

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