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    Muhammad Usman 2077 Cert 4 Accounting

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    gazan
    The document appears to be an accounting assignment discussing depreciation methods for machinery. It includes depreciation schedules using the straight-line, units of production, and reducing balance methods. It also includes comparisons of the different methods' impact on net income and cash flow in the first year. The reducing balance method is identified as maximizing both first year income and cash flow.

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    Muhammad Usman 2077 Cert 4 Accounting

    Uploaded by

    gazan
    89 views10 pages
    The document appears to be an accounting assignment discussing depreciation methods for machinery. It includes depreciation schedules using the straight-line, units of production, and reducing balance methods. It also includes comparisons of the different methods' impact on net income and cash flow in the first year. The reducing balance method is identified as maximizing both first year income and cash flow.

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    Assignment

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    The document appears to be an accounting assignment discussing depreciation methods for machinery. It includes depreciation schedules using the straight-line, units of production, and reducing balance methods. It also includes comparisons of the different methods' impact on net income and cash flow in the first year. The reducing balance method is identified as maximizing both first year income and cash flow.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    89 views10 pages

    Muhammad Usman 2077 Cert 4 Accounting

    Uploaded by

    gazan
    The document appears to be an accounting assignment discussing depreciation methods for machinery. It includes depreciation schedules using the straight-line, units of production, and reducing balance methods. It also includes comparisons of the different methods' impact on net income and cash flow in the first year. The reducing balance method is identified as maximizing both first year income and cash flow.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 10

    Muhammad Usman

    2077
    Cert 4 Accounting

    A)

    B)
    C)
    Date Asset Cost
    1-2-20x1 70000
    31-12-20x1
    31-12-20x2
    31-12-20x3
    31-12-20x4
    31-12-20x5
    31-12-20x6

    Date Asset Cost


    1-2-20x1 70000
    31-12-20x1
    31-12-20x2
    31-12-20x3
    31-12-20x4
    31-12-20x5
    31-12-20x6

    Date Asset Cost


    20x1 70000
    20x1
    20x2
    20x3
    20x4
    20x5
    20x6

    Depriciation method that maximize 1st year income is R.B


    Depriciation method that maximize 1st year cash flow is R.B

    Comparison of Net Income for 1st year

    Cash Provided by operation before income tax


    Depreciation Expense
    Income before tax
    Income tax expense(30%)
    Net Profit
    Net Profit advantage of SL over RB

    Cash Flow Analysis for first Year

    Cash provided by operation before income tax


    income tax expense
    Cash provided by operation
    Cash flow advantage of RB over SL
    Machinery Service
    Straght line Depreciation Schedule
    Depreciation for the year

    Depreciation rate Deprection Cost


    16.666667 55800
    16.67 55800
    16.66 55800
    16.66 55800
    16.66 55800
    16.66 55800
    16.66 55800

    Unit of Production Depreciation Cost


    Depri. Kilo meter Number of Kilometer
    $558
    $558 18000
    $558 18000
    $558 18000
    $558 18000
    $558 14000
    $558 14000
    100000

    Reducing Balance Depreciation Schedule


    R.B Rate Asset Bookvalue

    25% 70000
    25% 52500
    25% 39375
    25% 29531
    25% 22148
    25% 16611
    Depreciation Amount Accumulated Depreciation Asset Carying amount
    9300 70000
    9300 9300 60700
    9300 18600 51400
    9300 27900 42100
    9300 37200 32800
    9300 46500 23500
    9300 55800 14200

    Depreciation Amount Accumulated Depriciation Asset Carrying Amount


    70000
    10044 10044 59956
    10044 20088 49912
    10044 30132 39868
    10044 40176 29824
    7812 47988 22012
    7812 55800 14200

    Schedule
    Depr. Amount Acc. Deprication Asset Carrying Amount
    70000
    17500 17500 52500
    13125 30625 39575
    9844 40469 29531
    7383 47852 22148
    5537 53389 16611
    4153 57542 12458
    Maximize Reported Income
    SL

    150000
    9300
    140700
    42210
    98490
    5740

    150000
    42210
    107790
    2460
    Minimize Reported
    Income RB

    150000
    17500
    132500
    39750
    92750

    150000
    39750
    110250

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