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HW8.Solution - NAME(Printed(Last(First IE 343 HW#8 Due Nov...

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NAME (Printed): _________________,________________ (Last) (First) IE 343 HW #8 Due: Nov. 1, 2013 1 | P a g e Instructions for completing the homework assignment: Write your name on the top of each page submitted for the assignment. Homework must be legible. Box, underline, or highlight your final answer . Homework must be submitted at the beginning of class on the due date. Late homework will not be accepted . All pages of the homework assignment must be stapled together . Please use this template . Failure to do any of the items listed above will result in a deduction of points from your homework grade. Problem 1 Samantha Corporation has purchased new furniture for their offices at a retail price of $200,000. An additional $30,000 has been charged for insurance, shipping, and handling. The company expects to use the furniture for 10 years (useful life = 10 years) and the salvage value at the end of year 10 is $10,000. Use the SL method for depreciation to answer these questions. a. What is the depreciation during the second year? Solution: The cost basis for the furniture = 200,000 + 30,000 = $230,000 Using straight line method (depreciation is same for all years) ( ) b. What is the BV of the asset at the end of the first year? Solution: c. What is the BV of the asset after 10 years?
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