A company purchases an industrial laser for $140000. The device has a usetul e of 4 years and a salvage value (market value) at the end of those four years of S50.000. The beforetax cash fow is estimated to be $90,000 perYou, of course, suggested applying the 3year MACRS (GDS) method instead of the straight ine method Given an effective tax rate of 24%. determine the depreciation schedule and the ater tax cash fowb. Based on the MAČRS depreciation schedule for this asset E the industrial laser was sold for S90.000 in year two (consider year bwo to be the "year 2" row in the table in Pan (a), what wilbe the amount of gain (depreciationrecapture) or loss on the disposal of the asset at the end of this year?yeCick the lcon to view the GOS Recovery Rates () for the 3year property classa. Determine the MACRS depreciation amounts and the ater tax cash flow for this laser. Fl in the table below (Round to the nearest dollar)Depreciation, SAICFS-140.000EOY

Name: A company purchases an industrial laser for $140000. The device has a
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Description: A company purchases an industrial laser for $140000. The device has a usetul e of 4 years and a salvage value (market value) at the end of those four years of S50.000. The beforetax cash fow is estimated to be $90,000 perYou, of course, suggested ap

The cost of the later is $140,000 and the life span s 4 years. The salvage value is 50000. The…

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Acompany purchases an industriallser for S140.000. The device has ausefu of yean and asahage valemakat valehe end of those four years of S50000. The before-ta cash fow is estimated e be S90.000 per course suggested applying the 3year MACRS GOS) method instead of the straigheine method Gven an efective taate of 24s, determine the depreciation schedue and the ater ta cash fow ACRS deprediation schedule for this anse he industrallser was the daposal of the assetthe end of this year You for S0 000 in year e (consider year to be the "year owin the able in Parn whatbe the amount of gain depreciation ecapture)

Acompany purchases an industriallser for S140.000. The device has ausefu of yean and asahage valemakat valehe end of those four years of S50000. The before-ta cash fow is estimated e be S90.000 per course suggested applying the 3year MACRS GOS) method instead of the straigheine method Gven an efective taate of 24s, determine the depreciation schedue and the ater ta cash fow ACRS deprediation schedule for this anse he industrallser was the daposal of the assetthe end of this year You for S0 000 in year e (consider year to be the "year owin the able in Parn whatbe the amount of gain depreciation ecapture)

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 11PA: Montezuma Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and...

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The Scampini Supplies Company recently purchased a new delivery truck. The new truck cost $22,500, and it is expected to generate net after-tax operating cash flows, including depreciation, of $6,250 per year. The truck has a 5-year expected life. The expected salvage values after tax adjustments for the truck are given here. The company’s cost of capital is 10%. Should the firm operate the truck until the end of its 5-year physical life? If not, then what is its optimal economic life? Would the introduction of salvage values, in addition to operating cash flows, ever reduce the expected NPV and/or IRR of a project?
Montezuma Inc. purchases a delivery truck for $20,000. The truck has a salvage value of $8,000 and is expected to be driven for ten years. Montezuma uses the straight-line depreciation method. Calculate the annual depreciation expense. After five years of recording depreciation, Montezuma determines that the delivery truck will be useful for another five years (ten years in total, as originally expected) and that the salvage value will increase to $10,000. Determine the depreciation expense for the final five years of the assets life, and create the journal entry for years 6â€“10 (the entry will be the same for each of the five years).
Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one it expects to use the truck for 26,000 miles. Calculate the annual depreciation expense.
Montezuma Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for eight years. Montezuma uses the straight-line depreciation method. Calculate the annual depreciation expense. After three years of recording depreciation, Montezuma determines that the delivery truck will only be useful for another three years and that the salvage value will increase to $4,000. Determine the depreciation expense for the final three years of the assets life, and create the journal entry for year four.
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