Balls and Bats, Inc. purchased equipment on January 1, 2005, at a cost of $100,000. The estimated useful life is 4 years with a salvage value of $10,000. The purchase of long-lived assets are daily, quarterly and yearly occurrences for many corporations. The cost allocation of the asset is shown through the method of depreciation a company uses. The method a company chooses to incorporate should be one that most effectively matches expenses with the revenues produced. The method that most select is that of straight-line depreciation, which "spreads the depreciable value evenly over the useful life of an asset." (Horngren, Sundem, Elliott, & Philbrick 2006, p.342) Depreciation schedules reflect how much depreciation will be allocated for each year of the assets useful life. In order to calculate depreciation expense we take the cost of the acquisition minus the estimated residual value divided by the years of estimated useful life. The depreciation schedule using the straight-line method for Balls and Bats, Inc. would be as follows: Total Acquisition cost= $100,000

Salvage value= $10,000
Estimated useful life= 4 years
Depreciation expense= 100,000 - 10,000 = 22,500
4
D= $22,500 per year

Single-line Depreciation
Balances at End of Year
1234
Acquisition cost of
Equipment $ 100,000 $100,000 $100,000 $100,000
Accumulated Depreciation $ 22,500 $ 45,000 $ 67,500 $ 90,000 Net book value $ 77,500 $ 55,000 $ 32,500 $ 10,000

Balance at the end of year 4 equals salvage value of $10,000 Assets that shows a pattern of depreciation that is written off more quickly than regular straight-line method is referred to as accelerated depreciation. A form of this method is Double-declining balance, more commonly known as DDB. Using this method requires paying close attention to the residual value mainly because an asset can't be...

...Comprehensive Problem 1
c) Notes to the Financial Statements:
1. The company uses the straight-linedepreciation method. The rental equipment is estimated to have a useful life of eight years. Thus, the monthly depreciation of the rental equipment is 240,000/96, or $2,500 per month.
2. The note payable to Rent-It is good for one year. $100,000 and the accumulated interest are due on November 30, 2012. The account payable for office supplies is due in thirty days, or January 2, 2012. The account payable to Universal Utilities is due in thirty days, or January 30, 2012. The company declared a dividend of 10 cents per share, payable on January 15, 2012. Income taxes are payable in 2012.
3. Susquehanna Equipment Rentals was named as a co-defendant in a $25,000 lawsuit filed on behalf of Kevin Davenport. The extent of the company’s legal and financial responsibility for this accident cannot be determined at this time.
f) It does appear that the company is headed for insolvency. It has $100,000 is notes payable that are due January 2, 2012, and it only has $65,000 cash. The company is expecting $9,900 in accounts receivable, but that is still not enough to cover the notes payable. A majority of the company’s assets are tied up in rental equipment, which is not a liquid asset. Thus, the company will not be able to meet its financial obligations to its lenders.
g) It would be unethical for Patty Driver...

...declining – balance method? Assume a depreciation rate of twice the straight – line method.
Straightline method =- (cost-residual value) = 25000-5000
10 10
Depreciation per year = 2000
Depreciation after year 2 = 2000+2000=$4000
Book value at year 2 = $25,000-4000=$21,000
Answer: $21,000
16.
Q= Pete’s Warehouse has a market value of $5,000,000. The property in Pete’s area is assessed at 40% of the market value. The tax rate is $105.10 per $1,999 of assessed value. What is Pete’s property tax?
$5,000,000*40%=$2,000,000 assessed value
105.10*1.999=210094.90
$2,000,000/1999*105.10=105,152.576
Answer:Property tax =$ 105,152.58
17.
Q= Jim Smith, who lives in Territory 5 carries 10/20/5 compulsory liability insurance along with optional collision that has a $200 deductible. Jim was at fault in an accident that caused $1,800 damage to the other auto and $600 damage to his own. Also, the courts awarded $13,000 and $8,000 respectively, to the two passengers in the other car for personal injuries. How much does the insurance company pay, and what is Jim’s share of responsibility?
18. -
Q= Jeff Sellers bought 200 shares of Radio Shack stock at $22.35. Eight months later, he sold the stock at $31.76. Assuming a 2% charge, what is the bottom line for Jeff?
Shares bought = 200
Unit cost per share = $22.35
Cost = $200*22.35=$4,470
8...

...Ball and Bats, Inc.: Double Line method and the StraightLine Method
On January 1, 2005 the company Balls and Bats, Inc. made a
purchase of equipment. The cost of the equipment was one hundred thousand dollars and had life expectancy of four years. The following schedules are the double-declining balance method and the straightline method of depreciation. This schedule will assist Balls and Bats, Inc determine the best method to depreciate there new acquisition. Further, the schedules will determine which will glean a higher net income for the organization for the year ending December 31, 2005.
Double-declining balance method (DDB)
Year 1: D= .50(100,000)
= 50,000
Year 2: D= .50(100,000- 50,000)
= .50(50,000)
= 25,000
Year 3: D= .50(100,000-50,000-25,000)
= .50(25,000)
= 12,500
Year 4 D= .50(100,000-50,000-25,000-12,500)
= .50(12,500)
= 6,250
Declining-Balance at Twice
the Straight-Line
Rate (DDB)
Annual Depreciation Book Value
At Acquisition 100,000
2005 50,000 50,000
2006 25,000 25,000
2007 12,500 12,500
2008 2,500 10,000
Total 90,000
The Double-declining method is calculated utilizing the following formula:...

...computing book depreciation for health care organizations:
QUESTION
ANSWER – Do not forget to list references at the bottom of the paper. Write a minimum of 30 words for each area listed.
StraightLineDepreciation:
No salvage
Salvage
The simplest most commonly used depreciation method. The straightlinedepreciation method assigns an equal or even amount ofdepreciation expense over each year of the assets life. The calculation is (purchase price of asset-approx salvage value) divide by estimated useful life of asset.
Accelerated Book Depreciation:
Sum of Years’ Digits Method
Sum-of-the- Years (SYD) computes depreciation by multiplying the depreciation cost of the asset by a fraction. The depreciation is accelerated to reflect that items lose value more rapidly early in their history than late. Calculation = n(n+1) divided by 2.
Accelerated Book Depreciation:
Double Declining Balance Method
The double declining balance (DDB) computes depreciation by multiplying the assets net book value at the beginning of each year by a constant percentage or factor. The constant factor is twice the straightline rate. Under the DDB double means twice or 200% of the straightline...

...StraightLine Equations and Inequalities
A: Linear Equations - Straightlines
Please remember that when you are drawing graphs you should always label your axes and that y is always shown on the vertical axis. A linear equation between two variables x and y can be represented by y = a + bx where “a” and “b” are any two constants. For example, suppose we wish to plot the straightline If x = -2, say, then y = 3 + 2(-2) = 3 - 4 = -1 If x= -2 -1 -1 1 0 3 1 5 2 7 As you can see, we have plotted the five points on the graph. They do indeed all lie on a straightline and we have joined them together to show the line. Of course, you could draw the line by just plotting any two points on it and then joining and extending those two points. y = 3 + 2x ..... and so on (see table below)
Then y =
y
x
The equation simply represents the relationship between two variables x and y. For example: suppose our basic salary is £4000 and we add commission to that at the rate of 5% of our total sales. Call y our total salary and call x our sales (both in £) then we could represent this relationship as y = 4000 + 0.05x (5% is five hundredths i.e. 0.05) Then, if we knew that total sales were 6000, we could work out total salary: y = 4000+0.05(6000) or £4300
For our next example, we will draw the equation y = 6 - x on a graph (using just two...

...was sold on March 31, 2011, for $17,000. Howarth uses the straight-linedepreciation method for all of its plant and equipment. Partial-year depreciation is calculated based on the number of months the asset is in service. Prepare the journal entry to record the sale.
Assuming the company’s year end is March 31.
Depreciation for 2007-08: ((80000-5000)/5) X 9/12 = 11250
Depreciation for 2008-09: ((80000-5000)/5) = 15000
Depreciation for 2009-10: ((80000-5000)/5) = 15000
Depreciation for 2010-11: ((80000-5000)/5) = 15000
Total Depreciation 46250
Carrying Value on date of sale, ie March 31, 2011 = 80000-46250 =33750
Loss on sale is 33750 – 17000 = 16750
Journal Entry:
Cash Debit 17000
Loss on Sale of Machine Debit 16750
Accumulated Depreciation Debit 46250
Machine Credit 80000
20. Carnellian sold a piece of equipment for Rs. 30,000 on July 1, 2003. The equipment was purchased January 1, 2000 with an original cost of Rs. 50,000 and a 10 year life. Prepare journal entry for the above transaction assuming that the company calculates depreciation using the double declining method of depreciation.
Assuming the company’s year end is March 31:
Depreciation for 2000-01 for three months:50000/10 X 3/12 = 1250
Depreciation for 2001-02 for entire...

...Depreciation Methods
Depreciation is the accounting process of allocating the cost of tangible assets to expense in a systematic and rational manner to those periods expected to benefit from the use of the asset.
Factors Involved in the Depreciation Process
1. What depreciable base is to be used for the asset?
2. What is the asset’s useful life?
3. What method of cost apportionment is best for the asset?
Depreciable Base for the Asset
The base established for depreciation is a function of two factors: the original cost, and the salvage or disposal value. Salvage value is the estimated amount that the company will receive when it sell the asset or removes it from service. It is the amount to which the company writes down or depreciates the asset during its useful life.
Example:
An asset is purchased for $10,000. The company believes that it has a salvage value of $1,000.
Original cost $10,000
Less: Salvage value 1,000
Depreciation base $ 9,000
Methods of Depreciation
The accounting profession requires that the depreciation method employed be “systematic and rational.” The following are examples of depreciation methods:
1. Activity method (units of use or production)
2. Straight-line method
3. Decreasing charge methods (accelerated):
a. Sum-of-the-years’ digits
b. Declining-balance method...

...Team HMJM
BSA 522 Managerial Accounting
Professor Peggy Wright
October 5th, 2011
TO: Dr. Peggy Wright
FROM: Christina Smart, Sean Hall, Chaffon Mouzone, Alvin McLaughlin, and Lisette Jordan
DATE: October 5th, 2011
SUBJECT: Airline Depreciation
Introduction
Our team will assess four airlines based upon the different methods of depreciation, useful life, and residual value utilized. The accounting policies reflect the airlines position in determining which accounting methods they deem suitable to maximize profitability. It is important to understand why companies use different accounting principles within their company and analyzing the line of business, airline routes, age of aircrafts, and awareness of the economy are key factors for business managers.
Statement of the Problem
Estimating the replacements of aircrafts in relation to straightline versus accelerated can be difficult to estimate. The implication of the straightlinedepreciation with airlines, such as Delta, is taking a more liberal accounting approach. Management has to anticipate which accounting method would be more profitable to the airline. This can be difficult due to the uncertainty of the economy, wear and tear on the aircraft and proper book keeping methods. As flight hours increase the maturity factor, or costs...