Income tax Accounting

Income tax Accounting - 1150 Cost of tractor and front-end...

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11–50 Cost of tractor and front-end loader: Tractor. ............................................. $ 100,000 Front-end loader. ............................ 7,000 Shipping. .......................................... 600 Installation. ...................................... 800 Total cost. ..................................... $ 108,400 4 64 Chapter 11 11–50. (Concluded) 1 . Straight-line depreciation—2011: $108,$15,400000− salvage value8 years = $11,675 2 . Double-declining-balance depreciation—2011: End of Depreciation Accumulated Year Computation Amount Depreciation Book Value 2008 $108,400 × 0.25 $27,100 $27,100 $81,300 2009 81,300 × 0.25 20,325 47,425 60,975 2010 60,975 × 0.25 15,244 62,669 45,731 2011 45,731 × 0.25 11,433 74,102 34,298 3 . Sum-of-the-years’-digits depreciation—2011: Sum of years’ digits = 36 $108,400 – $15,000 = $93,400 × 5/36 = $12,972 4 . Service-hours depreciation—2011: $93,400/12,500 hours = $7.47 per hour 1,725 hours × $7.47 = $12,886
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11–57. 2007 No depreciation or depletion expense. 2008 Cost of land. ............................................................................... $ 5,400,000 2007 developmental costs. ....................................................... 300,000 2008 developmental costs. ....................................................... 200,000 Total 2008 cost. ......................................................................... $ 5,900,000 Less: Residual value. ................................................................ 700,000 Cost subject to depletion. ........................................................ $ 5,200,000 Depletion per ton: $5,200,000/4,000,000 tons = $1.30 per ton 2008 depletion: 1,200,000 × $1.30. ....................................... $ 1,560,000 Building cost. ............................................................................. $ 500,000 Depreciation per ton: $500,000/4,000,000 tons = $0.125 per ton 2008 depreciation: 1,200,000 × $0.125 .
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This note was uploaded on 07/10/2011 for the course BUSINESS 550 taught by Professor Backer during the Spring '11 term at Limestone.

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Income tax Accounting - 1150 Cost of tractor and front-end...

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