use of a single burden rate. Burden costs of the testing rooms as well as other costs such as admin were grouped into a single cost pool and then divided by the total labor dollars. This resulted to a single burden rate of 145% of direct labor dollars (cost driver). This method is not appropriate for Seligram because the information on the case present that direct labor hours and machine hours vary by product line and activity. In addition‚ the burden cost of the main and test room also significantly
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RICS Valuation Faculty The Depreciated Replacement Cost Method of Valuation for Financial Reporting Valuation Information Paper 10 Produced in association with Valuation Information Paper No. 10 The DRC Method of Valuation for Financial Reporting Acknowledgements RICS would like to thank Kingston University School of Surveying for their help in preparation of this Paper. Extracts from the ‘International Valuation Standards 2007’ are reproduced in this publication with the permission
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Chapter 9 Property Acquisition and Cost Recovery SOLUTIONS MANUAL Problems 39. [LO 1] Jose purchased a delivery van for his business through an online auction. His winning bid for the van was $24‚500. In addition‚ Jose incurred the following expenses before using the van: shipping costs of $650; paint to match the other fleet vehicles at a cost of $1‚000; registration costs of $3‚200 which included $3‚000 of sales tax and a registration fee of $200; wash and detailing for $50; and an engine
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INTRODUCTION IN1–IN15 MALAYSIAN FINANCIAL REPORTING STANDARD 116 PROPERTY‚ PLANT AND EQUIPMENT OBJECTIVE SCOPE DEFINITIONS RECOGNITION Initial costs Subsequent costs MEASUREMENT AT RECOGNITION Elements of cost Measurement of cost MEASUREMENT AFTER RECOGNITION Cost model Revaluation model Depreciation Depreciable amount and depreciation period Depreciation method Impairment Compensation for impairment DERECOGNITION DISCLOSURE TRANSITIONAL PROVISIONS EFFECTIVE DATE WITHDRAWAL OF OTHER PRONOUNCEMENTS
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4.1 Understand tax depreciation procedures and the effect of depreciation on the firm’s cash flows. 1) Depreciation deductions‚ like any other business expenses‚ reduce the income that a firm reports on its income statement. Answer: TRUE Diff: 1 Topic: Depreciation Learning Obj.: LG 1 Learning Outcome: F-02 Question Status: Previous Edition AACSB Tag: Analytic Skills 2) Non-cash charges are expenses that involve an actual outlay of cash during the period but are not deducted on the income
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1. What are at least four depreciation methods that are available to a company? There is the Activity Method‚ Straight-line Method‚ Sum-of-the-Years’-Digits Method and the Declining-Balance Method. 2. What are the similarities and the differences? The Activity Method‚ which is also known as the variable charge or units of production method. With this method‚ we consider the productivity and not the passage of time. The life of the asset is considered by the output and the input. There
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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
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Depreciation Essay A method of accelerated depreciation‚ in which double the straight-line depreciation amount is taken the first year and then that same percentage‚ is applied to the un-depreciated amount in subsequent years is called double-declining-balance-method. Depreciation methods that provide a higher depreciation charge in the first year of an asset’s life and gradually decreasing charges in subsequent years are called “accelerated depreciation methods”. This may be
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assets acquired during 2010: Asset Cost Date Place in Service Office equipment $10‚000 02/03/2010 Machinery $560‚000 07/22/2010 Used delivery truck* $15‚000 08/17/2010 *Not considered a luxury automobile‚ thus not subject to the luxury automobile limitations During 2010‚ TM had huge success (and had no §179 limitations and Steve acquired more assets the next year to increase its production capacity. These are the assets which were acquired during 2011: Asset Cost Date Place in Service Computers&Info
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lathe on June 30‚ 2007‚ at a cost of $80‚000. The residual value of the lathe was estimated to be $5‚000 at the end of a five-year life. The lathe was sold on March 31‚ 2011‚ for $17‚000. Howarth uses the straight-line depreciation 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)
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