Calculate the annual depreciation expense

Assignment Help Financial Accounting
Reference no: EM132955482

Question - Dave's Contract Farming Service Ltd purchased a new tractor on 1 July 2018 for $350,000. The tractor is expected to have a useful life of 10 years. At the end of the tractor's estimated useful life, Dave estimates that its residual value will be $30,000.

On 31 December 2020, the company sold the tractor for $300,000. The company has a year-end of 30 June.

Required -

(i) Calculate the annual depreciation expense (2019 & 2020) for the tractor, using the straight-line method and Reducing balance method (Assume 20% rate). Marks 15

(ii) Calculate the Gain or Loss for the Disposal of Tractor under both methods.

(iii) Explain the reasons for the differences of profit or loss under Straight line and Reducing balance method.

Reference no: EM132955482

Questions Cloud

What is the net investment in the lease : An entity is a dealer in equipment and uses leases to facilitate the sale of its product. What is the net investment in the lease
What are the four financial statements : What are the four financial statements. What is the purpose of each financial statement and how are each financial statement related to the other
How much is the sales revenue at break-even point : The following data refers to the cost-volume-profit relationships of Company CCC: How much is the sales revenue at break-even point
Determine Romagna plc total cost per equivalent unit : Determine Romagna plc's total cost per equivalent unit of production, the cost of goods transferred to the packaging department, and the cost of the ending work
Calculate the annual depreciation expense : Calculate the annual depreciation expense (2019 & 2020) for the tractor, using the straight-line method and Reducing balance method
What is the present value of money : Question - What is the present value of money? How is it calculated? Why is it important for business planning
Explain the general basics of the regulatory rules : Discuss the general basics of the regulatory rules applying to insider trading and its implications and address the Ethical implications.
How much is the purchase price of machinery net of discount : The remaining useful life of the asset as of revaluation date is 10 years. How much is the purchase price of the machinery net of discount?
What is dyer current stock price : A company is expected to pay a dividend of $1.15 per share at the end of the year, and that dividend is expected to grow at a constant rate of 6.00% per year in

Reviews

Write a Review

Financial Accounting Questions & Answers

  What conclusion can be drawn from the horizontal analysis

What conclusion can be drawn from the horizontal analysis? Prepare a comparative income statement with horizontal analysis, indicating the increase.

  At what price did wrigleys stock last trade

At what price did Wrigley's stock last trade? What is the 52-week range of Wrigley's stock? When was the last time Wrigley's stock hit a 52-week high?

  Restoration will cost

Becky Dool just inherited a 1967 Ford Mustang from her late Aunt Cybil. Aunt Cybil purchased the car 40 years ago for $6,000. Becky is either going to sell the car for $8,000 or have it restored and sell it for $22,000. The restoration will cost $6,0..

  What the interest capitalized was

What The interest capitalized for 2016 was? On January 2, 2016, Indian River Groves began construction of a new citrus processing plant.

  Compute unit conversion cost on cost of production report

Department W had 2,400 units, one-third completed at the beginning of the period; 16,000 units were transferred to Department X from Department W during the period; and 1,800 units were one-half completed at the end of the period. Assume the completi..

  Table contains calculations of several key ratios

The following table contains calculations of several key ratios for Indianola Pharmaceutical Company, a maker of proprietary and prescription drugs. The company is publicly held and is considered a small-to medium-size pharmaceutical company. What ot..

  Profit margin and investment turnover ratios

The Chewy Chocolate Division of the Delight Confection Company had a rate of return on investment (ROI) of 12 percent (= $1,200,000/$10,000,000) during Year 5,  Break down the ROI for Year 5 and Year 6 into profit margin and investment turnover ratio..

  Find quarters of the way through an accounting period

Company were using a perpetual inventory system, the balance in its inventory account three- quarters of the way through an accounting period would be equal to

  How much money can barry and mary gift to grandchildren

How much money can Barry and Mary gift to their grandchildren in 2017 without any gift tax liability? Mary have accumulated over $3.5 million

  What is the value of the company for ved ltd

The corporate tax is 30%. Ved also has a perpetual bond issue outstanding with a market value of ?20 lakhs. What is the value of the company?

  Calculate amount of revenue and gross profit

In the year 2013, the Ford Trucking Company entered into a contract to construct a building for $15,000,000. The building was completed in 2015. Information related to the contract is as follows: Calculate the amount of revenue and gross profit to be..

  Calculate interest expense for December

Valor Ltd. issued $2,000,000 of 6%, 10 year bonds on September 30, 2020 when the effective interest rate was 8%. Calculate interest expense for December

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd