earnings, depreciation, etc.
a.(1) Straight-Line (nearest whole month)
Depreciation Accumulated Book
Year Expense Depreciation Value
2005 $600 $600 $15,400 «- Correct!
2006 800 1,400 14,600 «- Correct!
2007 800 2,200 13,800 «- Correct!
2008 800 3,000 13,000 «- Correct!
a.(2) 200% Declining-Balance (half-year convention)
Depreciation Accumulated Book
Year Expense Depreciation Value
2005 $800 $800 $15,200 «- Correct!
2006 1,520 2,320 13,680 «- Correct!
2007 1,368 3,688 12,312 «- Correct!
2008
a.(3) 150% Declining-Balance (half-year convention)
Depreciation Accumulated Book
Year Expense Depreciation Value
2005 $600 $600 $15,400 «- Correct!
2006 1,155 1,755 14,245 «- Correct!
2007
2008
b. Management wants to report the highest possible earnings in its
financial statements, yet it also wants to minimize its taxable
income reported to the IRS. Explain how both of these
objectives can be met.
c. Which of the depreciation methods resulted in the lowest
reported book value at the end of 2008? Is book value an
estimate of an asset's fair market value? Explain.
The above is a homework question, correct are the responses that I have done. I have tried every way to fill in the later blanks for above, but no avail.
200 and 150% depreciation are to be done with half year convention
please help me
thanks
