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solve using exel 11. A tractor for over-the-road hauling is purchased for $90,000. It is expected to be of use to the company for 6
solve using exel
11. A tractor for over-the-road hauling is purchased for $90,000. It is expected to be of use to the company for 6 years, after which it will be salvaged for $4,000. Calculate the depreciation deduction and the unrecovered investment during each year of the tractor's life. a. Use straight-line depreciation (9.3} b. Use declining-balance depreciation, with a rate that ensures the book value equals the salvage value (9.4) c. Use double declining balance depreciation (9.4) d. Use double declining balance, switching to straight-line depreciation (9.5) :9. Use sum-of-years'-digits depreciation (9A) 23. Englehard purchases a slurry-based separator for the mining of clay that costs $100,000 and has an estimated useful life of 10 years, a MACRS-GDS property class of 3' years, and an estimated salvage value of $?5 ,000 after 10 years. It was nanced using a $200,000 down payment and a loan of $500,000 over a period of 5 years with interest at 10 percent. Loan payments are made in equal annual amounts (principal plus interest) over the 5 years. a. What is the amount of the MACRSGDS depreciation taken in the third year? b. What is the book value at the end of the third year? c. Returning to the original situation, what is the amount of the MACRS-GDS depreciation taken in the third year if the separator is also sold during the third year? 2.9. A virtual mold apparatus for producing dental crowns permits an innite number of shapes to be custom constructed based upon mold imprints taken by dentists. It costs $28,500 and is purchased at the beginning of the tax year. It is expected to last 9 years with no salvage value at that time. The dental supplier depreciates assets using MACRS but values assets of the company using straight-line depreciation. Determine the depreciation allowance and the unrecovered investment for each year using each of the following: a. For tax purposes (be sure to identify the MACRS-GDS property class) (9.6.2) b. For company valuation purposes (9.3)Step by Step Solution
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