Business, 26.11.2019 04:31 safelix1260

Ahigh-precision programmable router for shaping fur- niture components is purchased by henredon for $190,000. it is expected to last 12 years and have a salvage value of $5,000. calculate the depreciation deduction and book value for each year. a. use straight-line depreciation. b. use declining balance depreciation using a rate that ensures the book value equals the salvage .

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Answer from: CourtGard

a) Annual depreciation = $15,416.67

b) Depreciation rate = 0.2615

Explanation:

Data provided in the question:

Cost of router = $190,000

Useful life = 12 years

Salvage value = $5,000

Now,

a) Using straight-line depreciation

Annual depreciation = $\frac{\textup{Cost - Salvage value}}{\textup{Useful life}}$

= $\frac{\$190,000-\$5,000}{\textup{12}}$

= $15,416.67

Hence,

Year Depreciation Book value

1 $15,416.67 $190,000 - $15,416.67 = $174,583.33

2 $15,416.67 $174,583.33 - $15,416.67 = $159166.66

3 $15,416.67 $159166.66 - $15,416.67 = $143749.99

4 $15,416.67 $143749.99 - $15,416.67 = $128333.32

5 $15,416.67 $128333.32 - $15,416.67 = $112916.65

6 $15,416.67 $112916.65 - $15,416.67 = $97499.98

7 $15,416.67 $97499.98 - $15,416.67 = $82083.31

8 $15,416.67 $82083.31 - $15,416.67 = $66666.64

9 $15,416.67 $66666.64 - $15,416.67 = $51249.97

10 $15,416.67 $51249.97 - $15,416.67 = $35833.3

11 $15,416.67 $35833.3 - $15,416.67 = $20416.63

12 $15,416.67 $20416.63 - $15,416.67 = $4999.96

b) using declining balance depreciation

Depreciation rate = $1 - (\frac{salvage}{Cost})^{\frac{1}{n}}$

here, n = useful life

thus,

Depreciation rate = $1 - (\frac{5,000}{190,000})^{\frac{1}{12}}$

= 0.2615

Therefore,

Year Depreciation Book value

1 0.2615 × $190,000 $190,000 - $49685 = $140315

2 0.2615 × $140315 $140315 - $36692.3725 = $103622.62

3 0.2615 × $103622.6 $103622.62 - $27097.30 = $76525.32

4 0.2615 × $76525.32 $76525.32 - $20011.37 = $56513.95

5 0.2615 × $56513.95 $56513.95 - $14778.39 = $41735.56

6 0.2615 × $41735.56 $41735.56 - $10913.84 = $30821.72

7 0.2615 × $30821.72 $30821.72 - $8059.87 = $22761.85

8 0.2615 × $22761.85 $22761.85 - $5952.22 = $16809.63

9 0.2615 × $16809.63 $16809.63 - $4396.22 = $12413.41

10 0.2615 × $12413.41 $12413.41 - $3246.10 = $9167.31

11 0.2615 × $9167.31 $9167.31 - $2397.25 = $6770.06

12 0.2615 × $6770.06 $6770.06 - $1770.37 = $4999.69

Answer from: Quest

Ibelieve that the answer is d. because that is the only option that is efficient.

Answer from: Quest

The atomic nucleus is the small, dense region consisting of protons and neutrons at the center of an atom, discovered in 1911 by ernest rutherford based on the 1909 gold foil experiment.

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