Zul Cleaning Company bought a new delivery truck for RM45,000. Additional fitting for the truck costs RM2,500. The truck is expected to have a useful life of 5 years, and is classified as a light-duty truck and can be depreciated either by straight line method or MACRS.

MACRS rate: http://www.milefoot.com/math/businessmath/topics/macrs.htm

At the end of life the truck, it will be sold for RM5,000. The company's tax is 24%.

1. The cost of the truck is RM_____________.

2. The salvage value is RM__________.

3. Based on SLM, the annual depreciation expense is RM___________.

4. Based on SLM.

Accumulated depreciation in Year 3 is RM_______.

5. Based on SLM.

The book value/ Net Asset Value (NAV) in Year 4 is RM_______.

6. Based on MACRS.

The depreciation expense in Year 2 is RM__________.

7. Based on MACRS

The accumulated depreciation expense in Year 4 is RM__________.

8. Based on MACRS.

The book value/ NAV in Year 5 is RM__________.

9. Based on MACRS.

The gain/ loss of disposal of asset is RM__________.

10. Based on MACRS.

Assume: The truck is sold in Year 4 instead of Year 5 for the same value.

The after tax cash flow/ tax shield on the disposal of asset is RM__________.

Answer rating: 100% (QA)

1 RM47500 Cost of the truck RM45000 Additional fitting RM2500 RM45000 RM2500 RM47500 2 RM5000 Salvag... View the full answer