Malvern Contractors purchased a new bull-dozer for 85,000. Shipping charges were 1,500 and other costs associated with the bull-dozer amounted to 925. The bull-dozer is expected to last 5 years and has a residual value of 10,000. Malvern elects to use the straight-line method of depreciation. a. What is the amount of total depreciation? b. What is the amount of the annual depreciation?
Q. 2The term used in quoting shipping charges that means free on board or freight on board is F.O.B.
Indicate whether the statement is true or false
Q. 3The Lions Minor League baseball franchise purchased 5 batting cages for a total of 102,500. They are expected to have a 7 year useful life and a trade-in value of 5,000. Using the 150 declining-balance method of depreciation, what is the book value at the end of the first year?
Q. 4A document detailing a sales transaction that contains a list of goods shipped or services rendered with an account of all costs is called an order form.
Indicate whether the statement is true or false
Q. 5Chrysler Corporation purchased special tools to be used in the assembly process of the Mustang in the amount of 7,200,000. The residual value after 3 years was estimated to be 900,000. They used the straight-line method of depreciation for financial statement reporting and MACRS for the amount of depreciation reported to the IRS. a. Which method of depreciation resulted in the largest write-off in the first year? b. How much greater was the write-off using your answer to (a) above?
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