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    Test Your Knowledge Depreciation: Having Your Cake and Eating It Too!

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    The document discusses depreciation accounting and different depreciation methods including straight line, double declining balance, and sum-of-the-years digits. It provides examples of calculating depreciation over multiple years for imaging equipment and computer equipment. It also addresses how for-profit organizations can benefit from tax laws and different depreciation methods.

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    Test Your Knowledge Depreciation: Having Your Cake and Eating It Too!

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    jhouvan
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    The document discusses depreciation accounting and different depreciation methods including straight line, double declining balance, and sum-of-the-years digits. It provides examples of calculating depreciation over multiple years for imaging equipment and computer equipment. It also addresses how for-profit organizations can benefit from tax laws and different depreciation methods.

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    26753_ch09_finkler

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    The document discusses depreciation accounting and different depreciation methods including straight line, double declining balance, and sum-of-the-years digits. It provides examples of calculating depreciation over multiple years for imaging equipment and computer equipment. It also addresses how for-profit organizations can benefit from tax laws and different depreciation methods.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    28 views1 page

    Test Your Knowledge Depreciation: Having Your Cake and Eating It Too!

    Uploaded by

    jhouvan
    The document discusses depreciation accounting and different depreciation methods including straight line, double declining balance, and sum-of-the-years digits. It provides examples of calculating depreciation over multiple years for imaging equipment and computer equipment. It also addresses how for-profit organizations can benefit from tax laws and different depreciation methods.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    of 1

    Accounting Fundamentals Steven A.

    Finkler
    for Health Care Management David M. Ward

    Test Your Knowledge

    Chapter 9
    Depreciation:
    Having Your Cake and Eating It Too!

    1) Explain how the matching principle requires the use of depreciation for assets
    that have useful lives beyond one year.

    2) Explain the difference between amortization and depreciation.

    3) Identify and explain the 4 steps in the depreciation process.

    4) An organization has just acquired new imaging equipment. The equipment cost
    $2,500,000 and the organization spent $70,000 on upgrading the physical plant
    where the new equipment will be located. The imaging equipment is expected to
    have a 15 year useful life and a salvage value of $200,000. Calculate the first
    five years of depreciation using straight line, double declining balance, and
    sum-of-the-years digits.

    5) An organization has just acquired new computer equipment. The equipment cost
    $50,000. The computer equipment is expected to have a 5 year useful life and a
    salvage value of $3,000. Calculate the five years of depreciation using straight
    line, double declining balance, and sum-of-the-years digits.

    6) Explain how for-profit organizations can use the tax laws and the different
    depreciation methods to receive an interest free loan from the government.

    © 2010 Jones and Bartlett Publishers, LLC 1

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