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Two Accounting Problems Set




Question;PROBLEM# 1: DepreciationPart A: Depreciation Expense CalculationsThe Rialto Theatre purchased a new projector costing $74,000 on January 1, 2012. Because of changing technologies, the projector is estimated to last five years after which it will be obsolete and have a salvage value of $2,000 as a collectors? item. Compute the depreciation expense for ALL YEARS using:a. The straight-line methodb. Double-declining-balance methodPlease show your workings in Excel.Part B: Depreciation MethodsYou are the CFO of a small start-up company and are trying to decide between using the straightline depreciation method, the double-declining-balance depreciation method, or another usebased depreciation. What should you consider as you make your choice?PROBLEM# 2: Computing and estimating useful lifePlease show your workings in Excel.The 2011 financial statements for Leggett & Platt, Inc. report the following information:Year ended December 31,20112010$ 98.1$ 103.0580.6624.245.248.51, millions)Depreciation and amortization expenseProperty and equipment, netLandAccumulated depreciation and amortizationa. By what percentage are the assets ?used up? at the year-end 2011? What implicationdoes this ratio have for future cash flows at Leggett & Platt?b. Estimate the useful life on average for the Leggett & Platt depreciable assets.


Paper#39928 | Written in 18-Jul-2015

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