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Requirements e1. Compute Austin Airliness first-year depreciation expense on the plane using the following methods: a. Straight-line b. Units-of-production c. Double-declining-balance 2. Show the airplanes book value at the end of the first year for all three methods. ir Print Done a on the nlens using the double-declinina-halance meth
town 1,800.000 miesthe first yea tems with a zero value
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Straight-line method Cost Salvage Value Depreciable Amount Life in vears Annual Depreciation 61,000,000 7,000,000 54,000,000 Z-X-Y 10,800,000 Depreciation Expense Accumulated Year Year Depreciable cost Depreciation Carrving Value 54,000,000 10,800,000 43,200,00010,800,000 21,600,000 39,400,000 32,400,000 10,800,000 $ 32,400,000 21,600,00010,800,000 43,200,000 17,800,000 10,800,000 10,800,000 10,800,000 50,200,000o 28,600,000 7,000,000 4 4 S 54,000,000 S Depreciation in first year $ 10,800,000 Units of production method Units of activity depreciation-The assets cost is then allocated to the accounting periods based on the plant assets usage, units produced, activity, etc Total estimated productive output miles Cost Salvage Value Depreciable amount 6,000,000 miles 61,000,000 7,000,000 54,000,000 Z-X-Y Depreciation per Unit 9.00 N-Z/M Depreciation (not impacted by no of Accumulated Actual Units of Rate Year production Depreciation Carrving Value 9.00 1,600,000 14,400,000 14,400,000 46,600,000 Depreciation in first year $ 14,400,000

Double-declining balance Straight-line depreciation rate =(100% divided by 5 years). Double the straight-line rate is This rate is applied to the book value of the asset at the beginning of each year. (Book value is cost minus accumulated depreciation.) 20.00% 40% Cost of Machinery 61,000,000 Salvage Value Depreciable amount54,000,000 7,000,000 Opening Carrying Value Accumulated Year Depreciation Depreciation Book Value 61,000,000 Salvage value is ignored 61,000,000 24,400,000 24,400,000 36,600,000 $36600,000 14,640,000 39,040,000 $ 21,960,000 $21,960,000 8,784,000 47,824,000 13,176,000 13,176,000 5,270,400 53,094,400 $7,905,600 905,600 54,000,000 7,000,000 2 4 5 7,905,600 $ () depreciation stops when book value residual value Depreciation in first year 24,400,000

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