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Muhammad Usman

2077
Cert 4 Accounting

A)

B)

C) .

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

67 55800 16.66 55800 16.66 55800 16.B Rate Asset Bookvalue 25% 70000 25% 52500 25% 39375 25% 29531 25% 22148 25% 16611 .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. Machinery Service Straght line Depreciation Schedule Depreciation for the year Depreciation rate Deprection Cost 16.666667 55800 16.

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

Maximize Reported Income SL 150000 9300 140700 42210 98490 5740 150000 42210 107790 2460 .

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Minimize Reported Income RB 150000 17500 132500 39750 92750 150000 39750 110250 .