At the end of this year, a farm tractor, a depreciable asset, will have a cost...

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At the end of this year, a farm tractor, a depreciable asset, will have a cost at $1,750,000 to buy. It is also estimated to have a residual/scrap/salvage value of $250,000 at the completion of its depreciable life of five years. A) By drawing annual depreciation schedules, compute the depreciation allowances, D(n), and the associated the end-of-year book values, B(n), through using the following depreciation methods: The straight-line (SL) method. ii) The double declining balance (DDB) method. B) From the depreciation schedules computed in (A) above: Using straight-line depreciation, how much can be depreciated annually over the 5-year life of the tractor? What is the book value of the asset at year 3? i) Using double-declining balance, what is the allowable depreciation for year 3 of the asset? What is the book value of the asset this year? C) For DDB method, if switching to SL method is allowed when is the optimal time to switch? ii) At the end of this year, a farm tractor, a depreciable asset, will have a cost at $1,750,000 to buy. It is also estimated to have a residual/scrap/salvage value of $250,000 at the completion of its depreciable life of five years. A) By drawing annual depreciation schedules, compute the depreciation allowances, D(n), and the associated the end-of-year book values, B(n), through using the following depreciation methods: The straight-line (SL) method. ii) The double declining balance (DDB) method. B) From the depreciation schedules computed in (A) above: Using straight-line depreciation, how much can be depreciated annually over the 5-year life of the tractor? What is the book value of the asset at year 3? i) Using double-declining balance, what is the allowable depreciation for year 3 of the asset? What is the book value of the asset this year? C) For DDB method, if switching to SL method is allowed when is the optimal time to switch? ii)

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