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Unformatted text preview: I. ASSET VALUATION AND DEPRECIATION Assets can be valued using either a cost-based valuation system or a market-based valuation system. For each asset listed, place a C in the blank under the most appropriate valuation method to use for that asset when using a cost system. Place an M in the blank under the valuation method that should be used under a market based valuation system. Valuation Methods Farm Cost less Production Market ASSET Depreciation Cost Cost Value Tractor C M Grain sorghum in storage C/M Purchased Feeder cattle C M Purchased beef breeding cows C M Raised beef breeding cows C M Wheat crop growing in field C/M Land C M Hay barn C M II. STRAIGHT LINE DEPRECIATION The next two problems provide a closer look at Straight Line versus Double Declining Balance Depreciation. In these problems, assume all machinery is brought at the first of the year. Machine Cost Salvage Value Useful Life 1) Tractor A 50,000 20,000 5 2) Tractor B 60,000 0 5 3) Combine 84,000 0 7 ________________________________________________________________...
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- Fall '08