economics hw?
Noaf18
homework_7.docx$ Homework 7 & Help Sheet (35 Points) $
Assignment:
Complete the following problems. You must show your work on the math problems to get full credit. Every student is responsible for completing their own responses to the following problems.
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1. Consider the following data on an asset:
Cost of the asset, I: $25,000 Useful life, N: 5 years Salvage value, S: $3,000
Compute the annual depreciation allowances and the resulting book values, using the straight-line depreciation method.
2. A company's accounting record shows the following:
Truck A Truck B Useful Life (miles): 250,000 200,000 Miles Driven During Year: 13,000 11,000 Purchase Cost: $40,000 $30,000 Salvage Value: $4,250 $3,000
Determine the amount of depreciation for each truck during the year.
3. Consider the following data on an asset:
Cost of the asset, I: $35,000 Useful life, N: 7 years Salvage value, S: $4,000
Compute the annual depreciation allowances and the resulting book values, using the double-declining-balance method.
4. Identify which of the following expenditures is considered as a capital expenditure that must be depreciated (capitalized):
a) Painted the warehouse building, both interior and exterior, for $16,500. b) Installed a conveyor belt system to automate some part of a production processes for $25,000. c) Purchased a fax machine for $8,000. d) Paid $18,000 to lease a dump truck for eight months. e) Purchased a new computer system for $5,000. f) Purchased land to build a new facility for $400,000. g) Installed a water dispenser in a company dining area for $3250. h) Purchased a patent on an energy-saving device over six years at a cost of $42,000. i) Repaved a parking lot for $15,000. j) Purchased a spare part for a framing machine for $5,000.
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