Question
On January 1, 2012, Scout Manufacturing purchased new equipment for $145,000. The equipment was estimated to have a five-year useful life and a salvage value
On January 1, 2012, Scout Manufacturing purchased new equipment for $145,000. The equipment was estimated to have a five-year useful life and a salvage value of $15,000. Scout estimates that the equipment will produce 81,250 units over its useful life. However, it actually produces 18,000 units in 2012, 17,500 units in 2013, 17,750 units in 2014, 17,000 units in 2015, and 15,000 units in 2016. Depreciation Schedule
Straight-Line Method
year Depreciation Base Useful Life Depreciation Expense Net Book Value 2012 130000 5 26000 119000 2013 130000 5 26000 93000 2014 130000 5 26000 67000 2015 130000 5 26000 41000 2016 130000 5 26000 15000
I got this Table correct.
Depreciation Schedule
Double Declining Balance Method
year | Net Book Value (beg of year) | Declining-Balance Rate | Depreciation Expense | Net Book Value (End of year) |
2012 | 145000 | 40 | ||
2013 | 40 | |||
2014 | 40 | |||
2015 | 40 | |||
2016 | 40 | 15000 |
Depreciation Schedule
Units of Activity Method
year | units | Depreciation Expense | Accumulated Depreciation | Net Book Value |
2012 | 18000 | |||
2013 | 17500 | |||
2014 | 17750 | |||
2015 | 17000 | |||
2016 | 15000 | 130000 | 15000 |
B)Assuming a tax rate of 30%, how much more could Scout defer in taxes in the first year by using the double-declining-balance method versus the straight-line method? $____?
Everything I filled in is right. struggling to find the rest and need some help. Thank you.
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