Question

Please also do for double declining balance! Thanks!

Bramble Company purchased a new plant asset on April 1, 2020, at a cost of $753,000. It was estimated to have a service life of 20 years and a salvage value of $64,200. Bramble' accounting period is the calendar year. - Your answer is partially correct. Compute the depreciation for this asset for 2020 and 2021 using the sum-of-the-years'-digits method. (Round answers to 0 decimal places, e.g. 45,892.) Depreciation for 2020 $ 49200 Depreciation for 2021 $ 57869 e Textbook and Media Attempts: 2 of 3 used Save for Later Submit Answer

Answer 1

Sum of Year's Digits Method

>> Sum of years = 20 ( 20 + 1 ) / 2 = 210

>> Depreciation for 2020 = ( $ 753,000 - $ 64,200 ) * ( 20 / 210 ) * ( 9 / 12 )

>> Depreciation for 2020 = $ 49,200.

>> Remaining period = 20 - ( 9 /12 ) = 19.25.

>> Depreciation of 2021 = ( $ 753,000 - $ 64,200 ) * ( 19.25 / 210 )

>> Depreciation of 2021 = $ 63,140.

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Double declining balance method.

>> Depreciation rate = 200 / 20 = 10 %.

>> Depreciation for 2020 = $ 753,000 * 10 % * ( 9 / 12 ) = $ 56,475.

>> Depreciation for 2021 = ( $ 753,000 - $ 56,475 ) * 10 % = 69,653

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