Smart hardware purchased new shelving for its store on

Assignment Help Accounting Basics

Reference no: EM13581662

Smart Hardware purchased new shelving for its store on April 1, 2011. The shelving is expected to have a 20-year life and no residual value. The following expenditures were associated with the purchase:

Cost of shelving $12,000
Freight Charges $ 520
Sales Taxes $ 780
Installation of shelving $ 2,700

Cost to repair shelf damaged during installation $400

a. Compute depreciation expense for the years 2011 through 2013 under each depreciation method listed below:.

1. Straight-line, with frational years rounded to the nearest whole month.

2. 200 percent declining-balance, using the half-year convention.

3. 150 percent declining-balance, using the half-year convention.

b. Smart Hardware has two conflicting objectives. Management wants to report the highest possible earning in the financial statements, yet it also wants to minimize its taxable income reported to the IRS. Explain both of these objectives can be met.

c. Which of the depreciation methods applied in part a resulted in the lowest reported book value at the end of 2014? Is book value an estimate of an asset's fair value? Explain.

Reference no: EM13581662

Questions Cloud

Not included in the physical count of inventory is 10962 of : werth company asks you to review its december 31 2012 inventory values and prepare the necessary adjustments to the

Checking account balance 716200 cash restricted for future : checking account balance 716200 cash restricted for future plant expansion 517960 short-term treasury bills 190700 cash

The balance sheet is the cornerstone of the financial : the balance sheet is the cornerstone of the financial statements. the sec has always wanted and expected more

For each individual situation determine the amount that : for each individual situation determine the amount that should be reported as cash.checking account balance 937790

Smart hardware purchased new shelving for its store on : smart hardware purchased new shelving for its store on april 1 2011. the shelving is expected to have a 20-year life

The following information pertains to tanzi company assume : the following information pertains to tanzi company. assume that all balance sheet amounts represent both average and

How has internet played a role in expanding international : how has internet played a role in expanding international operations and what affect has it had on jobs in this

Describes the audit risk model and its various components : describes the audit risk model and its various components. please select a financial statement account in your industry

You have been assigned the task of testing the accuracy of : you have been assigned the task of testing the accuracy of the final inventory compilation for mt. hood furniture. you

User Account

All Pages