Solution:
a) Straight Line Method:
Year | Depreciable Cost | Depreciation Expense | Accumulated Depreciation | Carrying Amount |
$ 272,000 | ||||
2018 | $ 264,000 | $ 49,500 | $ 49,500 | $ 222,500 |
2019 | $ 264,000 | $ 66,000 | $ 115,500 | $ 156,500 |
2020 | $ 264,000 | $ 66,000 | $ 181,500 | $ 90,500 |
2021 | $ 264,000 | $ 66,000 | $ 247,500 | $ 24,500 |
2022 | $ 264,000 | $ 16,500 | $ 264,000 | $ 8,000 |
b) Double Diminishing Balance Method:
Year | Opening Carrying Amount | Depreciation Expense | Accumulated Depreciation | Carrying Amount |
$ 272,000 | ||||
2018 | $ 272,000 | $ 113,333 | $ 113,333 | $ 158,667 |
2019 | $ 158,667 | $ 79,333 | $ 192,667 | $ 79,333 |
2020 | $ 79,333 | $ 39,667 | $ 232,333 | $ 39,667 |
2021 | $ 39,667 | $ 19,833 | $ 252,167 | $ 19,833 |
2022 | $ 19,833 | $ 11,833 | $ 264,000 | $ 8,000 |
Note:
1) Depreciation rate under Double Diminishing Balance Method = (1 / useful life of asset ) * 2 = (1/4)* 2 = 50%
2)Under Double Diminishing Balance Method, final year depreciation will be differences between final year opening book value minus salvage value.
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