Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
TESTBANK SOLUTIONS
Section 1DEPRECIATION ON THE FINANCIAL STATEMENTS V. TAX RETURN
1. b.
2. a.
3. c.
4. b.
5. b.
Section 2DEPRECIATION UNDER GAAP (FOR BOOK PURPOSES)
1. b. $220,000/($180,000 + $220,000) $300,000 = $165,000
2. c. $180,000/($180,000 + $220,000) $300,000 = $135,000
3. c. $700 cost + $35 sales tax + $40 freight = $775
4. d.
5. d. $100,000 + $700 sales tax + $100 delivery + $75 installation = $10,875
Section 3THE STRAIGHTLINE METHOD OF DEPRECIATION
1. a Machine No. 1 ($6,000 $1,000)/5 years = $1,000
Machine No. 2 ($6,000 $1,000)/10 years = 500
Machine No. 3 ($11,000 $1,000)/10 years = 1,000
$2,500
2. c. ($9,000 $2,000)/5 9/12 = $1,050
3. a. ($9,000 $2,000)/5 = $1,400
4. b. 20X1: ($9,000 $2,000)/5 9/12 = $1,050
20X2: ($9,000 $2,000)/5 = 1,400
20X3: ($9,000 $2000)/5 = 1,400
$3,850
5. d. ($59,000 $8,000)/10 = $5,100 annual depreciation 3 years = $15,300
accumulated depreciation at the end of 20X3
$59,000 cost $15,300 accumulated deprec. = $43,700 book value
6. c. Machine No. 1 ($80,000 $14,000)/12 6/12 = $2,750
Machine No. 2 ($55,000 $10,000)/8 6/12 = 2,813
Machine No. 3 ($27,000 $3,000)/5 6/12 = 2,400
$7,963
7. a. ($25,000 $1,000)/10 8/12 = $1,600
8. c. ($50,000 $5,000)/10 = $4,500
9. b. 20X1: ($25,000 $1,000)/10 8/12 = $1,600
20X2: ($25,000 $1,000)/10 2,400
20X3: ($25,000 $1,000)/10 2,400
$6,400
10. d.
Testbank Solutions 1
Mastering Depreciation
11. a. ($59,000 $8,000)/10 = $5,100 annual depreciation 4 years = $20,400
accumulated depreciation at the end of 20X4
© American Institute of Professional Bookkeepers, 2010
Section 4THE UNITS OF PRODUCTION (UOP) METHOD OF
DEPRECIATION
1. b. ($16,000 $1,000)/15,000 = $1 per unit cost
15,000 estimated machine hours 3,000 used in 20X1 2,200 used in 20X2
6,170 used in 20X3 = 3,630 hours left for 20X4 $1 = $3,630
2. c. ($260,000 $10,000)/2,520,000 = $.0992 per unit cost 220,000 units
produced during 20X1 and 20X2 = $21,824
3. b.
4. a. ($24,000 $4,000)/100,000 = $.20 per unit rate
20,000 miles $.20 = $4,000
5. a. ($36,000 $6,000)/60,000 = $.50 per mile 35,000 miles driven from
20X120X3 $.50 = $17,500 accumulated depreciation at the end of 20X3
$36,000 cost $17,500 accumulated depreciation = $18,500 book value
12/31/X3
Section 5THE DECLINING BALANCE (DB) METHOD OF DEPRECIATION
1. b. 1/12 years 200% = 16.6667% DDB rate
20X1 depreciation: $250,000 16.6667% 8/12 = $27,778
20X2 depreciation: ($250,000 $27,778) 16.6667% = 37,037
Accumulated depreciation at the end of 20X2 $64,815
$250,000 cost $64,815 accumulated depreciation = $185,185 book value
2. d. 1/10 years 200% = 20% DDB rate
20X1 depreciation: $200,000 20% 6/12 = $20,000
20X2 depreciation: ($200,000 $20,000) 20% = $36,000
3. a. 1/12 years 200% = 16.6667% DDB rate
20X1 depreciation: $500,000 16.6667% = $ 83,334
20X2 depreciation: ($500,000 $83,334) 16.6667% = 69,444
Accumulated depreciation at the end of 20X2 $152,778
20X3 depreciation: ($500,000 $152,778) 16.6667% = 57,870
Accumulated depreciation at the end of 20X3 $210,648
20X4 depreciation: ($500,000 $210,648) 16.6667% $ 48,225
4. b. 1/15 years 200% = 13.3333% DDB rate
$250,000 13.3333% 9/12 = $25,000
5. d. 1/10 years 150% = 15% declining balance rate
$200,000 15% 10/12 = $25,000
6. a. 1/10 years 200% = 20% DDB rate
20X1 depreciation: $200,000 20% = $40,000
20X2 depreciation: ($200,000 $40,000) 20% = $32,000
Testbank Solutions 2
Mastering Depreciation
7. b. 1/10 years 150% = 15% DDB rate
$200,000 15% 11/12 = $27,500
8. d. 1/8 years 200% = 25% DDB rate × $100,000 6/12 = $12,500
$100,000 cost $12,500 accumulated depreciation = $87,500 book value
9. b. 1/50 years 200% = 4% DDB rate
$500,000 4% 1/12 = $1,667
10. a. 1/40 years 200% = 5% DDB $600,000 8/12 = $20,000
Section 6THE SUMOFTHEYEARS’DIGITS (SYD) METHOD OF
DEPRECIATION
1. a. sumoftheyears’ digits when n = 10: (10 11)/2 = 55
($550,000 $50,000) 9/55 = $81,818
2. c. sumoftheyears’ digits when n = 7: (7 8)/2 = 28
($450,000 $40,000) 4/28 = $58,571
3. b. sumoftheyears’ digits when n = 8: (8 9)/2 = 36
($125,000 $5,000) 8/36 6/12 = $13,333
4. d. sumoftheyears’ digits when n = 15: (15 16)/2 = 120
20X1 depreciation: ($125,000 $5,000) 15/120 = $15,000
$125,000 cost $15,000 accumulated depreciation = $110,000 book value
5. a. sumoftheyears’ digits when n = 10: (10 11)/2 = 55
($150,000 $10,000) 10/55 10/12 = $21,212
6. c. sumoftheyears’ digits when n = 12: (12 13)/2 = 78
1st year depreciation: ($260,000 $10,000) 12/78 = $38,462
2nd year depreciation: ($260,000 $10,000) 11/78 = $35,256
20X2 depreciation = ($38,462 4/12) + ($35,256 8/12) = $36,325
Section 7DEPRECIATION UNDER FEDERAL INCOME TAX DEPRECIATION
RULES
1. a.
2. b. $6,000 20% = $1,200. Bonus depreciation does not apply to used assets.
3. b.
4. d. ($10,000 50% bonus depreciation) + ($5,000 14.29%) = $5,715
5. b. $10,000 14.29% = $1,429. Bonus depreciation does not apply to used
assets.
6. a.
7. c.
8. c.
9. b.
10. d.
Section 8TAX DEPRECIATION OF PASSENGER CARS AND OTHER VEHICLES
Testbank Solutions 3
Mastering Depreciation
1. b. IRS limits apply to passenger autos (vehicles weighing 6,000 pounds or
less). For 2009 the limit for a used car is $2,960.
2. c. Although IRS limits do not apply to heavy SUVs (more than 6,000 pounds
up to 14,000 pounds), there is a Section 179 limit of $25,000.
3. b. The 2009 IRS limit for new passenger autos, including bonus depreciation,
is $10,960.
4. c.
Testbank Solutions 4