Problem 11-31: Use the data from Problem 31 to not only calculate the depreciation schedule four...

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Problem 11-31: Use the data from Problem 31 to not only calculate the depreciation schedule four ways, but also find the Afte

ou use UI talc? 11-31 A small used delivery van can be purchased for $20,000. At the end of its useful life (8 years), the va

Problem 11-31a Year Tax ATCE BTCF Purchase & salvage -20.000 BTCF benefits expenses Straight Line Book Value Taxable come 500

Problem 11-31: Use the data from Problem 31 to not only calculate the depreciation schedule four ways, but also find the After Tax Cash Flows (ATCE) and calculate the Net Present Value (NPV) and Rate of Return (IRR) for each different method. The spreadsheet is organized to help you and the BTCF is $5000 (note: earlier version of the spreadsheet used a BTCF of $4000, so check that column after you download the template). Note that if you depreciate down below the book value you have to "recapture" the untaxed portion of the salvage value in the last year and pay taxes on it. You can tell this is the case if the book value at the end is below the salvage value. That happens frequently with some of the depreciation methods. You will see examples in the book.

ou use UI talc? 11-31 A small used delivery van can be purchased for $20,000. At the end of its useful life (8 years), the van can be sold for $3000. Determine the PW of the depreciation schedule based on 15% interest using: (a) Straight-line depreciation (b) Double declining balance depreciation (c) 100% bonus depreciation (d) MACRS depreciation

Problem 11-31a Year Tax ATCE BTCF Purchase & salvage -20.000 BTCF benefits expenses Straight Line Book Value Taxable come 5000 50.00 5000 5000 5000 5000 500D 5000 3000 NPW= RR= Problem 11-31b Year Book Value Tax ATCE Double Decig Balance Taxable come BTC BTCF Puchsel benefits & salvage expenses -200.00 50.00 5000 50.00 5000 5000 50.00 5000 100 5000 | NPW= RR= Problem 11-31c Year 100% Boms Book Value Tax ATCE Taxable hcome BICE | BTCF Pacae benefits & salvage expenses -20000 5000 5000 5000 50.00 5000 5000 5000 30:00 5000 NPW= RR= Problem 11-310 Year | Тах ATCE WACRS 15 year cka) Book Value Taxable cone BTCE | BTCF Purchase benefits & salvage expenses 20000 5000 5000 5000 5000 50.00 5000 5000 30:00 5000 NPW= RR=

 · Answer

Problem 11-31 A) In Straight Line Method the Calculation will be like Annual Depreciation Expense= (Asset Value - Residual Value/ Goods Sold) / Useful life of an asset ($20,000-$3,000)=$17,000/8= $2,125 1st year that will be $20,000-$2,125=$17,875 2nd year will be $17,875-$2,125=$15,750 and after 8 year the value will be arise $3,000 which is sold value of the asset Problem 11-31 B) In Double Declining Balance Depreciation calculation will be like the depreciation method will be like straight line method but the percentage will be double in that method i.e. In straight Line the depreciation value is $2,125 now in this method it will get double like 1st Year ($20,000-$4,250)=Book Value $15,750 2nd year will be ($15,750-$3,346)=Book Value $12,404 Depreciation percentage 21.25% 3rd year ($12,404-$2,635)= Book Value $9,769 Depreciation Percentage 21.25% Problem 11-31 C) 100% Bonus Depreciation will be calculated like In this formula will directly deduct the amount like Assset value$20,000 PW is 15% So the asset value asset value will be $20,000*15/100= $3,000 Problem 11-31 D) MACRS stand for Modified Accelerated Cost Recovery System calculation will be like 1st year 14.29% 2nd year 24.49% 3rd year 17.49% 4th year 12.49% 5th year 8.93% 6th year 8.92% 7th year 8.93% 8th year 4.46%

Problem 11-31: Use the data from Problem 31 to not only calculate the depreciation schedule four...

Problem 11-31: Use the data from Problem 31 to not only calculate the depreciation schedule four...

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