Quiz

1. Miss Zaira purchased a machine which will cost $2,97000 when purchased this year. It is
further expected to have a salvage value of $5340 at the end of its five year depreciable
life. Calculate complete depreciation schedules giving the depreciation charge, D(n), and
end-of-year book value, B(n), for straight-line (SL), sum of the years digits (SOYD) and
Reducing balance method.
2. Mr. Hamza Gillani wants to meet increased sales, a large dairy is planning to purchase 27
new Vans. Each van will cost $19,750. Compute the depreciation schedule for each truck,
using the Reducing balance method method, if the recovery period is 7 years.
3. Saba Textiles, Inc. purchased Ginning machinery for $759,348 four years ago. Due to a
change in the method of Ginning the machine was recently sold for $97,547. Determine
the Reducing balance method deprecation schedule for the machinery for the four years
of ownership. Assume a five year property class. What is the recaptured depreciation or
loss on the sale of the machinery?
4. Abbas Industries recently purchased a new Machine for $478,296. It is expected to last
14 years and has an estimated salvage value of $4,397. Determine the depreciation charge
on the crusher for the third year of its life and the book value at the end of 8 years, using
Reducing balance method depreciation
5. In the production of beverage, a final filtration is accomplished, which is composed of the
three stages. Miss Noma has purchased a property for filtering the beverages for
$978,41653 which has a salvage value of 784,295 that contains an estimated 90,758 tons.
Compute the depreciation charges for the first three years, if a production (or extraction)
of 7,954 tons, 19,813 tons, and 54,179 tons are planned for years 1, 2, and 3,
respectively., find the depreciation for respective years
6. On March 20, 2012, Shazib Chaudhary Systems acquired two new assets. Asset A was
research equipment costing $39,7583 and having a 5-year recovery period. Asset B was
duplicating equipment having an installed cost of $37,954,725 and a 7-year recovery
period. Using the MACRS depreciation percentages