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AC2799 Week 4 Depreciation Analysis 41

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AC2799 Week 4 Depreciation Analysis 41;Scenario for Analysis;Drive and Fly, an airport parking service, incurred the following costs to acquire land, buildings, and other expenditures;to start the business. Here are the various expenditures incurred.;Expenditures Amount;Land price $80,000;Previous delinquent taxes paid at closing by Drive and Fly $5,600;Earthmoving $9,000;Title Insurance $3,200;Fence around boundary $9,100;Building Permit for new building $500;Architects fee for new building $20,700;Signage at front of property $9,000;Building cost (labor and materials) $375,000;Construction loan interest cost $9,500;Parking lot construction costs $29,000;Lights for parking lots $11,300;Construction supervisor salary (80% to building, 20% to land improvements) $80,000;Furniture $11,600;Freight costs for furniture FOB shipping point $2,200;Landscaping $6,300;Tow Truck $25,000;Three Busses to shuttle to/from airport $90,000;Computer system $12,000;Land has an unlimited lifespan, the building has a 40-year lifespan, land improvements have a 20-year lifespan;furniture has a 10-year lifespan, the tow truck has a five-year lifespan, the computer system has a five-year lifespan;with 40% of derived revenue in year one, 25% in year two, 15% in year three, and 10% for remaining years, and finally;the shuttle busses have an eight-year or 50,000 travel hours.;Tasks also include calculating the depreciable cost for the land, land improvements, building, furniture, truck, busses;and computer. Then determine which depreciation method would be best and why.

 

Paper#30744 | Written in 18-Jul-2015

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