chapter 8

# chapter 8 - 2 Pollution control equipment was not expense...

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Problem 8-1 1. Depression Expense 18 Accumulate Depression 18 (312-303=18) 2. Cost/ Depression expense 602/18=33.4 years 3. Accumulate depression/Depression expense 321/18=17.8 years Problem 8-8 1. Toner recorded: 165,000/10=16,500 The correct amount will be= 150,000+15,000+4,000+25,000+3,000=197,000/10=19,700 2. Actual It should be \$100,000 \$100,000 <4,000> <19,700> <25,000> -------------- <3,000> 80,300 <16,500> ----------- \$51,500 3. Cost= goes to cash flow Expense= what goes to income statement Problem 8-9 1. 2005 depression: 364,000-14,000=350,000/25=14,000 2006 depression: 364,000-14,000=350,000-14,000=3,30,000+42,000=3,78,000=12,600

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Unformatted text preview: 2. Pollution control equipment was not expense it increases the life time of the building. If he considers this an expense it will reduce his net income. If he has a choice he could choice the way that is more suitable for his company. If it is public limited company then he would capitalized it to show the share holders less expenses. If it is a single owners company then he would consider it expense to reduce the income tax and net income.\ 3. Net book value= 364,000 <14,000> <12,600> 42,000 < 31,500>--------------<376,250> 392,000-----------Gain 15,750...
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