Scribd
Upload
381 views4 pages

Depreciation Methods Homework Answer

Uploaded by

Steven Sanderson
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLS, PDF, TXT or read online on Scribd
381 views4 pages

Depreciation Methods Homework Answer

Uploaded by

Steven Sanderson
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLS, PDF, TXT or read online on Scribd
You are on page 1/ 4

Methods:

1) Straight Line Initial Cost - Residual Value (scrap, salvage, trade-in) = Deprec. Exp. Per year
# of Years of Useful Life

Cost $175,000 $175,000 - $15,000 = $32,000 deprec. per ye


Life 5 years 5 yrs.
Salvage $15,000

Year Dep. Exp. A/D Bk. Value


1 32,000 32,000 143,000
2 32,000 64,000 111,000
3 32,000 96,000 79,000
4 32,000 128,000 47,000
5 32,000 160,000 15,000

2) 200% Double Declining Balance

*** Rate
Cost $175,000 200 % = 40% per yr
Life 5 years 5 yrs.
Salvage $15,000

Year Cost - Accum. Dep = Bk. Value X Rate = Dep. Exp.


1 175,000 - 0 = 175,000 X 40% = 70,000
2 175,000 - 70,000 = 105,000 X 40% = 42,000
3 175,000 - 112,000 = 63,000 X 40% = 25,200
4 175,000 - 137,200 = 37,800 X 40% = 15,120
5 175,000 - 152,320 = 22,680 X 40% = 9,072 must use 7,680

Year Dep. Exp. A/D Bk. Value


1 70,000 70,000 105,000
2 42,000 112,000 63,000
3 25,200 137,200 37,800
4 15,120 152,320 22,680
5 7,680 160,000 15,000

3) Units of Activity Initial Cost - Residual Value = Deprec. Exp. Per Unit
# of Units of Useful Life
*** Units of Activity (hours used)
Cost $175,000 Year A 100,000
Life 320,000 Hours Year B 80,000
Salvage $15,000 Year C 50,000
Year D 70,000
Year E 20,000
320,000

$175,000 - $15,000 = $.50 per hour depreciation


320,000 HRS.

Year Units X Rate = Dep. Exp. A/D Bk. Value


1 100,000 X $.50 = 50,000 50,000 125,000
2 80,000 X $.50 = 40,000 90,000 85,000
3 50,000 X $.50 = 25,000 115,000 60,000
4 70,000 X $.50 = 35,000 150,000 25,000
5 20,000 X $.50 = 10,000 160,000 15,000
xp. Per year

32,000 deprec. per year

00 % = 40% per yr.

You might also like