Muhammad Usman

2077
Cert 4 Accounting

A)

B)
C)
Date Asset Cost
1-2-20x1 70000
31-12-20x1
31-12-20x2
31-12-20x3
31-12-20x4
31-12-20x5
31-12-20x6

Date Asset Cost

1-2-20x1 70000
31-12-20x1
31-12-20x2
31-12-20x3
31-12-20x4
31-12-20x5
31-12-20x6

Date Asset Cost

20x1 70000
20x1
20x2
20x3
20x4
20x5
20x6

Depriciation method that maximize 1st year income is R.B

Depriciation method that maximize 1st year cash flow is R.B

Comparison of Net Income for 1st year

Cash Provided by operation before income tax

Depreciation Expense
Income before tax
Income tax expense(30%)
Net Profit
Net Profit advantage of SL over RB

Cash Flow Analysis for first Year

Cash provided by operation before income tax

income tax expense
Cash provided by operation
Cash flow advantage of RB over SL
 Machinery Service
Straght line Depreciation Schedule
Depreciation for the year

Depreciation rate Deprection Cost

16.666667 55800
16.67 55800
16.66 55800
16.66 55800
16.66 55800
16.66 55800
16.66 55800

Unit of Production Depreciation Cost

Depri. Kilo meter Number of Kilometer
$558
$558 18000
$558 18000
$558 18000
$558 18000
$558 14000
$558 14000
100000

Reducing Balance Depreciation Schedule

R.B Rate Asset Bookvalue

25% 70000
25% 52500
25% 39375
25% 29531
25% 22148
25% 16611
 Depreciation Amount Accumulated Depreciation Asset Carying amount
9300 70000
9300 9300 60700
9300 18600 51400
9300 27900 42100
9300 37200 32800
9300 46500 23500
9300 55800 14200

Depreciation Amount Accumulated Depriciation Asset Carrying Amount

70000
10044 10044 59956
10044 20088 49912
10044 30132 39868
10044 40176 29824
7812 47988 22012
7812 55800 14200

Schedule
Depr. Amount Acc. Deprication Asset Carrying Amount
70000
17500 17500 52500
13125 30625 39575
9844 40469 29531
7383 47852 22148
5537 53389 16611
4153 57542 12458
Maximize Reported Income
SL

150000
9300
140700
42210
98490
5740

150000
42210
107790
2460
Minimize Reported
Income RB

150000
17500
132500
39750
92750

150000
39750
110250