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As part of the payment of an account receivable, the owner of a farm has received 30 chicken coops and 180 laying hens. As they
As part of the payment of an account receivable, the owner of a farm has received 30 chicken coops and 180 laying hens. As they are second-hand assets and that take time, before registering in the inventory, the owner must appraise said assets. Before calling the appraiser for an exact value, the farmer wants to get an idea of what the value might be to double check. He calculates the depreciation for the chicken coops assuming the useful life is 20 years and the ones he received are probably 5 years old. Also calculate depreciation for the layers, assuming the useful life is 18 months or 1.5 months and the hens you received are probably 2 months old. Use the straight line method (20 points) and then the decreasing balance method (30 points). a) New chicken coop $700 b) Layers $18 c) Make a comparison (it can be in words or in a graph) of the results you obtained in the linear method versus the method in declining balances. Bonus Points (5 points): In Exercise 2, if you wanted to depreciate quickly, which method would you use and what would the value be?
As part of the payment of an account receivable, the owner of a farm has received 30 chicken coops and 180 laying hens. As they are second-hand assets and that take time, before registering in the inventory, the owner must appraise said assets. Before calling the appraiser for an exact value, the farmer wants to get an idea of what the value might be to double check. He calculates the depreciation for the chicken coops assuming the useful life is 20 years and the ones he received are probably 5 years old. Also calculate depreciation for the layers, assuming the useful life is 18 months or 1.5 months and the hens you received are probably 2 months old. Use the straight line method (20 points) and then the decreasing balance method (30 points).
a) New chicken coop $700
b) Layers $18
c) Make a comparison (it can be in words or in a graph) of the results you obtained in the linear method versus the method in declining balances.
Bonus Points (5 points): In Exercise 2, if you wanted to depreciate quickly, which method would you use and what would the value be?
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