Homework Answers
Straight line Depreciation = (Original Value - Salvage Value) /
Useful Life
= ($180000 - $15000) / 4 = $41250 per year
| Year 1 | $ 27,500.00 | =41250*8/12 |
| Year 2 | $ 41,250.00 | |
| Year 3 | $ 41,250.00 | |
| Year 4 | $ 41,250.00 | |
| Year 5 | $ 13,750.00 | =41250*4/12 |
Double Declining Balance = Beginning Book Value x 2 times
Straight line rate
Straight line rate = 1/4 x 100 = 25%
| Beginning Value | Depreciation | Ending Value | |
| Year 1 | $ 1,80,000.00 | $ 60,000.00 | $ 1,20,000.00 |
| Year 2 | $ 1,20,000.00 | $ 60,000.00 | $ 60,000.00 |
| Year 3 | $ 60,000.00 | $ 30,000.00 | $ 30,000.00 |
| Year 4 | $ 30,000.00 | $ 15,000.00 | $ 15,000.00 |
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Depreciation Methods
Gruman Company purchased a machine for $198,000 on January 2,
2016. It made the following estimates:
Service life
5 years or 10,000 hours
Production
180,000
Residual value
$18,000
In 2016, Gruman uses the machine for 1,700 hours and produces
45,000 units. In 2017, Gruman uses the machine for 1,400 hours and
produces 30,000 units. If required, round your final answers to the
nearest dollar.
Required: 1. Compute the depreciation for 2016 and 2017 under each of the following...
Depreciation Methods A delivery truck costing $22.000 is expected to have a $2,000 salvage value at the end of its...
Depreciation Methods A delivery truck costing $22.000 is expected to have a $2,000 salvage value at the end of its useful life of four years or 100,000 miles. Assume that the truck was purchased on January 2. Calculate the depreciation expense for the second year using each of the following depreciation methods: (a) straight-line, (b) double-declining balance, and (c) units-of- production. (Assume that the truck was driven 30,000 miles in the second year.) Round all answers to the nearest dollar....
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Depreciation Methods
Gruman Company purchased a machine for $198,000 on January 2,
2016. It made the following estimates:
Service life
5 years or 10,000 hours
Production
180,000
Residual value
$18,000
In 2016, Gruman uses the machine for 1,700 hours and produces
45,000 units. In 2017, Gruman uses the machine for 1,400 hours and
produces 30,000 units. If required, round your final answers to the
nearest dollar.
Required: 1. Compute the depreciation for 2016 and 2017 under each of the following...
Depreciation Methods A delivery truck costing $22.000 is expected to have a $2,000 salvage value at the end of its useful life of four years or 100,000 miles. Assume that the truck was purchased on January 2. Calculate the depreciation expense for the second year using each of the following depreciation methods: (a) straight-line, (b) double-declining balance, and (c) units-of- production. (Assume that the truck was driven 30,000 miles in the second year.) Round all answers to the nearest dollar....
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