Financial accounting 16th Edition by Jan Williams,Susan Haka,Mark Bettner ,Joseph Carcello

تمرين 25

Davidson, DDS, purchased new furniture for its store on May 1, 2015.he furniture is expected to have a 10-year life and no residual value.he following expenditures were associated with the purchase:

Instructions
a.ompute depreciation expense for the years 2015 through 2018 under each depreciation method listed below:
1.traight-line, with fractional years rounded to the nearest whole month.
2.00 percent declining-balance, using the half-year convention.
3.50 percent declining-balance, using the half-year convention.
b.avidson, DDS, has two conflicting objectives.anagement wants to report the highest possible earnings in its financial statements, yet it also wants to minimize its taxable income reported to the IRS.xplain how both of these objectives can be met.
c.hich of the depreciation methods applied in part a resulted in the lowest reported book value at the end of 2018 Is book value an estimate of an asset's fair value Explain.
d.ssume that Davidson, DDS, sold the old furniture that was being replaced.he old furniture had originally cost $3,000.ts book value at the time of the sale was $400.ecord the sale of the old furniture under the following conditions:
1.he furniture was sold for $780 cash.
2.he furniture was sold for $250 cash.