practice of depreciation and depletion play an integral part in a company ’s cash flow and profit or loss statements. Depreciation‚ according to investopedia is a method of allocating the cost of a tangible asset over its useful life. Depletion is very similar to depreciation with very subtle differences‚ the first one being what is depreciated verses depleted. All assets (except land) are depreciated but the assets with natural resources are depleted. The methods on how depreciation and depletion
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out of 1 points Which of the following disclosures are optional under IAS 12? Selected Answer: b. a numerical reconciliation between the average effective tax rate and the applicable tax rate‚ disclosing also the basis of calculating the applicable tax rate Correct Answer: b. a numerical reconciliation between the average effective tax rate and the applicable tax rate‚ disclosing also the basis of calculating the applicable tax rate Question 2 0 out of 1 points Which of the following
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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
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the importance of depreciation expenses. Depreciation as a concept and in practice plays a very important role in a company ’s cash flow hence in funding. The reason ’s are basically two‚ firstly because depreciation is a way of self finance for an organization and secondly because is a way of decreasing taxes that the government claims as the company doesn ’t have to pay taxes on depreciation which consequently enlarges the cash flow of the company. As a term depreciation in accounting is the
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CURRENCY DEPRECIATION AND ITS IMPACTS Devaluation means decreasing the value of nation’s currency relative to gold or the currencies of other nations. Devaluation occurs in terms of all other currencies‚ but it is best illustrated in the case of only one other currency. Devaluation and Depreciation are sometimes used interchangeably‚ but they always refer to values in terms of other currencies and the value of currency is determined by the interplay of money supply and money demand. In common modern
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Relevant Cash Flows For Clark Upholstery Company’s Machine Renewal or Replacement decision Bo Humphries ‚ chief financial officer of Clark upholstery company‚ expects the firm’s net operating profit after taxes for the next 5 years to be as shown in the following table. Year Net operating profit after taxes 1 $100‚000 2
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stadium transaction on Ciclón’s 2003 Income Statement and Statement of Cash Flows (under the Indirect Method)‚ and on its Balance Sheet for the year ended on December 31th‚ 2003? Items to be addressed cash payment of $ 100 million cost of building the new stadium was $ 20 million market value of the land was $ 12 million the book value of the old stadium was $ 1 million useful live of the stadium was 40 years demolition cost at end useful live estimated $ 5 million (I take it as estimated $ 5 mio in 2043)
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legislation is enacted and the capital project is contracted early enough so that it is grandfathered in. With tax legislation grandfathered‚ the project gets the benefit of the new lower corporate tax rate and the old ACRS depreciation method. Although when presented with this project one year ago in 1984‚ Paperco was able to be postponed this capital project since it was merely “moderately attractive”. The prospect of new tax legislation being enacted as rumored makes the Net Present Value of the project
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Assignment Questions Question 1 Frank Crosby (who has never owned or run a business before) started a lawn mowing business (Crosby’s Cutters) as a temporary job/business which he intended to run until he started his business degree at the University of Woop Woop in Semester 2‚ 2014. To start the business on 1 April 2014‚ he deposited $1‚000 into a new bank account opened in the name of the business. The $1‚000 consisted of a $600 loan from his father and $400 of his own money. Frank rented
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Accounting Questions – Depreciation About http://www.HelpWithAssignment.com We are a bunch of talented and ambitious people from around the world. Our network spans 3 continents and several countries. This is necessary to service requests from different time zones. www.HelpWithAssignment.com has provided a platform for talented individuals to come together to help individuals do well in their assignments‚ homework‚ thesis‚ term papers and projects while earning a valuable side income. Question-
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