Zul Cleaning Company bought a new delivery truck for RM45,000. Additional fitting for the truck costs RM2,500. The truck is
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__________.