To calculate the decline in value for the year ending on 30 June 2017 for the taxpayer’s depreciating asset, we need to use the diminishing value method. The formula for calculating the decline in value using this method is:
Decline in Value = Cost × Days Held × (200% / 365) × Days to Next June 30 / 100
Let’s break down the information provided:
1. Cost of the asset: $3,000,000
2. Effective life of the asset: 6 years
3. Residual value: $100,000
4. The taxpayer acquired the asset on 1 July 2016, so it’s held for the entire year until 30 June 2017.
First, let’s calculate the depreciation expense for the first year (2016-2017):
Depreciation Expense = Cost – Residual Value
Depreciation Expense = $3,000,000 – $100,000 = $2,900,000
Now, we can use the formula to calculate the decline in value for the year:
Decline in Value = $2,900,000 × 365 × (200% / 365) × 365 / 100
Decline in Value = $2,900,000
So, the decline in value for the year ended 30 June 2017 is $2,900,000.
None of the provided answer choices matches the correct calculation.
As a renowned provider of the best writing services, we have selected unique features which we offer to our customers as their guarantees that will make your user experience stress-free.
Unlike other companies, our money-back guarantee ensures the safety of our customers' money. For whatever reason, the customer may request a refund; our support team assesses the ground on which the refund is requested and processes it instantly. However, our customers are lucky as they have the least chances to experience this as we are always prepared to serve you with the best.
Plagiarism is the worst academic offense that is highly punishable by all educational institutions. It's for this reason that Peachy Tutors does not condone any plagiarism. We use advanced plagiarism detection software that ensures there are no chances of similarity on your papers.
Sometimes your professor may be a little bit stubborn and needs some changes made on your paper, or you might need some customization done. All at your service, we will work on your revision till you are satisfied with the quality of work. All for Free!
We take our client's confidentiality as our highest priority; thus, we never share our client's information with third parties. Our company uses the standard encryption technology to store data and only uses trusted payment gateways.
Anytime you order your paper with us, be assured of the paper quality. Our tutors are highly skilled in researching and writing quality content that is relevant to the paper instructions and presented professionally. This makes us the best in the industry as our tutors can handle any type of paper despite its complexity.
Recent Comments