Depreciation and book value of investment

Assignment Help Accounting Basics
Reference no: EM1364798

BTech, LLC, a startup biotechnology company is preparing alternative proposals for producing a new product in an existing building. In the proposal being considered in this question, the building will be renovated and equipped in one year. Production then will start in year 1. MACRS depreciation will be used with depreciation deductions starting in year 1. The renovation will require the purchase and installation of two types of assets labeled "Group 5" and "Group 7" because they can be depreciated using 5 year and 7 year MARCS rates respectively. The Group 5 assets will costs $300,000 and the Group 7 assets will cost $800,000. Table 9.3 on page 448 contains the depreciation rates. The planning time horizon is six years after renovation.

a) Determine the depreciation and book value for each of the two investment groups for each year.

b) Determine the gain/loss for tax purposes If the Group 5 and Group 7 assets are sold at the end of the planning period for a combined $500,000.

Reference no: EM1364798

Questions Cloud

Reliability-validity-legality of appraisal ratings : Review of suggestions to improve the reliability, validity, and therefore, the legality, and usefulness of appraisal ratings are given.
How to assume the protons started from very far away : how to Assume the protons started from very far away. Need X and Y componet.
All about quantitative reasoning for business : What are two examples of how simultaneous equations are used in business? What are some of the different ways you can satisfy these equations?
Describe how each component of your model lends : Describe how each component of your model lends itself to optimal employee performance and Develop a coaching model that optimizes performance management activities.
Depreciation and book value of investment : Determine the depreciation and book value for each of the two investment groups for each year. Determine the gain/loss for tax purposes If the Group 5 and Group 7 assets are sold at the end of the planning period for a combined $500,000.
Find average number of books borrowed from database table : Find the average number of books borrowed per member. Take into account that if a member does not borrow any books, then that member does not appear in the borrowed relation at all.
Weaknesses are defined as constraints : Weaknesses are defined as constraints - How does below theory apply to your current or most recent employer?
Exchanging dollars for euro : If I plan to go to Germany thirty days and the spot exchange rate is $1.30=1 euro. The thirty day forward rate is $1.36=1 euro.
Government in health care policy formulation : Describe the relationship between the state and the federal government in health care policy formulation and implementation.

Reviews

Write a Review

Accounting Basics Questions & Answers

  Equity-method reporting situations

In what types of situations could it be appropriate to use equity-method reporting even though the investor does not hold voting common stock of the investee? Explain.

  Introductory section of cafr

The introductory section of a CAFR typically includes all of the following except

  Reduce goal incongruence

What is goal incongruence? How can using the metric "return on investment" for performance evaluation lead to goal incongruence?

  Compute depreciation and cash flow

Ohare Company's only asset as of January 1, 2007, was limousine. During 2007, only three transactions occurred:

  How fuunds are disclosed and reported

Find a newspaper or magazine even online and select an article relating to the use of governmental funds by state, county, local government, etc on an activity.

  Investing and operating activities

For each of the following items, indicate whether it would be classified and reported under the operating activities (OA), investing activities (IA), or financing activities (FA) section of a statement of cash flows:

  Information about risk aversion

Risk aversion implies which some securities will go unpurchased in market even if a large risk premium is paid to investors.

  Corporate annual report-nikon

Discuss the key factors that determined the company's financial performance during the year. Discuss what the primary assets held by the company are. Demonstrate how management portrays the internal control environment of NIKON.

  Making the bank reconciliation

Prepare the bank reconciliation for Janus Jutes, Inc. dated May 31, 2009. Janus made a deposit on May 31, but this deposit did not appear on the bank statement, $1,451.

  Forensic accounting-cash disbursements

Estimate the effects of falsifying records, diverting cash to ghost employees, and duplicating expenses on a small, midsize, and large business.

  Recording sales tax journal entries

Prepare an appropriate journal entry to indicate the impact of the transactions on the state's fund financial statements for the year ending December 31, 2011.

  Treasury stock purchase-reissue journal entry

Prepare journal entries (A,B,C) and show proper disclosure (C) to reflect the following treasury stock transactions showing how each is accounted for under the cost method. (show computation)

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