Calculate the allowable depreciation for year one

Assignment Help Financial Accounting

Reference no: EM131212888

Phil owns a ranch business and uses four-wheelers to do much of his work. Occasionally, though, he and his boys will go for a ride together as a family activity. During year 1, Phil put 892 miles on the four-wheeler that he bought on January 15 for $11,600. Of the miles driven, only 212 miles was for personal use. Assume four-wheelers qualify to be depreciated according to the five-year MACRS schedule and the four-wheeler was the only asset Phil purchased this year. (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)

a. Calculate the allowable depreciation for year 1 (ignore the §179 expense and bonus depreciation).

b. Calculate the allowable depreciation for year 2 if total miles were 1,410 and personal use miles were 610 (ignore the §179 expense and bonus depreciation).

Reference no: EM131212888

Questions Cloud

Determine the equivalent units of production : Lagana Corporation uses process costing. The following data pertain to its Assembly Department for February. Determine the equivalent units of production for the Assembly Department for February using the weighted-average method. Please show your wor..

Determine the compensation expense for the stock option plan : On October 15, 2012, the board of directors of Ensor Materials Corporation approved a stock option plan for key executives. On January 1, 2013, 30 million stock options were granted, exercisable for 30 million shares of Ensor's $1 par common stock. D..

What is current value of one share if required rate return : The Bell Weather Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 20% a year for the next four years and then decreasing the growth rate to 5% per year. The company just paid its annual div..

How many vcrs must be sold each year for firm to break even : Ellson Electronics Company manufactures video cassette recorders, which it sells for $300 per unit. Variable costs are $210 per unit, and fixed costs are $630,000 a year. The tax rate is 40%. How many VCRs must be sold each year for the firm to break..

Calculate the allowable depreciation for year one : Phil owns a ranch business and uses four-wheelers to do much of his work. Occasionally, though, he and his boys will go for a ride together as a family activity. During year 1, Phil put 892 miles on the four-wheeler that he bought on January 15 for $..

Sells custom windows for commercial office buildings : Windsor Windows manufactures and sells custom windows for commercial office buildings. Windsor also provides installation services for the windows. The installation process can be performed by other vendors if chosen by Windsor’s customers, but Winds..

Method of valuing inventory from the average cost method : The Cecil-Booker Vending Company changed its method of valuing inventory from the average cost method to the FIFO cost method at the beginning of 2013. At December 31, 2012, inventories were $123,000 (average cost basis) and were $127,000 a year earl..

Determine how many years the equipment : Tilly's Travel Service has made an investment in certain equipment that cost the company $353,616. The equipment is expected to generate cash inflows of $48,000 each year. Use your financial calculator or excel to determine how many years the equipme..

Determine the cost of ending work in process inventory : Oleksy Corporation uses the weighted-average method in its process costing. The following data concern the company's Assembly Department for the month of June. Determine the cost of ending work in process inventory and the cost of units transferred o..

User Account

All Pages