MIdterm Part 2 6-9

MIdterm Part 2 6-9 - Question 6 4 out of 7 points...

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Question 6 4 out of 7 points On January 1,  2010, Sparks  Company  purchased for  $2,160,000 snow- making  equipment having  an estimated  useful life of 5  years with an  estimated  salvage value of  $90,000.  Required a. Prepare a  depreciation  schedule for  the equipment  using the  double  declining  method;  assume that  Spark elects  to switch to  the straight  line method in  year three.  b. Indicate any  related  reporting  required in  order for  Spark’s 
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financial  statements to  be in  accordance  with GAAP.  Answer Selected Answer: Asset value Salvage value Life of asset Depreciation value Life of asset Depreciation value 5 Depreciation value Depreciation rate 38.3333% (19.1667x2) Years Rate 1 38.3333% 2 38.3333% 3 243,800 4 243,800 5 243,800 B. Nothing required to report the financial statements accordance with the GAAP the method of depreciation changes in between life of the project need to specify in the notes or disclosures about the change of depreciation method in the foot note. A. formulas for answers
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MIdterm Part 2 6-9 - Question 6 4 out of 7 points...

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