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9.3A ssues Involving Alternative Depreciation Methods Ycel Smart Hardware purchased new shelving for its store on April 1, 2011. The shelving is expected to have
9.3A ssues Involving Alternative Depreciation Methods Ycel Smart Hardware purchased new shelving for its store on April 1, 2011. The shelving is expected to have a 20-year life and no residual value. The following expenditures were associated with the purchase: Cost of the shelving. Freight charges Sales taxes. Installation of shelving. Cost to repair shelf damaged during installation a. Instructions Compute depreciation expense for the years 2011 through 2013 under each depreciation method listed below: b. C. $12,000 520 780 2,700 400 1. Straight-line, with fractional years rounded to the nearest whole month. 2. 200 percent declining-balance, using the half-year convention. 3. 150 percent declining-balance, using the half-year convention. Smart Hardware has two conflicting objectives. Management wants to report the highest pos- sible earnings in its financial statements, yet it also wants to minimize its taxable income reported to the IRS. Explain how both of these objectives can be met. Which of the
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