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Problem 9-4A Calculating depreclation-partial periods L02,3 eXcel CHECK FIGURES: DDB 2019 $110,400 West Coast Tours runs boat tours along the West Coast of British Columbia. On March 5, 2017, it pur chased, with cash, a cruising boat for $828,000, having a useful life of 10 years or 13,250 hours, with a residual value of $192,000. The companys year-end is December 31.
Requlred Calculate depreciation expense for the fiscal years 2017,2018, and 2019 by completing a sched- ule with the following headings (round to the nearest whole dollar) Depreciation Method Double-Declining-Balance Year Straight-Line Units-of-Production 1 Depreciation is calculated to the nearest month. 2 Assume actual hours of service were 2017,720; 2018, 1.780: 2019, 1,535. Analysls Component: If you could ignore the matching principle, how could you record the purchase of the boat? What impact would this have on the financial statements in the short and long term? Problem 9-5A Calculating depreciation-partial periods L02,3 eXcel CHECK FIGURE: DDB 2019 $119,232 Refer to the information in Problem 9-4A. Redo the question assuming that depreciation for partial peri ods is calculated using the half-year convention.
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Straight-line method Cost Salvage Value Depreciable Amount 828,000 192,000 636,000 Z-X-Y ars Annual Depreciation 63,600 Depreciation Accumulated Depreciable cost Expense Depreciation Carrying Value Year 636,000 572,400 508,800 445,200$ 381,600 53,600 63,600 764,400 63,600 127,200 700,800 53,600 190,800 53,600 254,400 6 $ 637,200 573,600 510,000 $ 53,600 318,000 $ 42,400 -63600 8/12 2018 63,600 2019 63,600 Unit s 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 hours Cost Salvage Value Depreciable amount 13,250 Hours 828,000 192,000 636,000 reciation per Unit 18.00 Depreciation (not impacted by no of Accumulated Actual Units of production Depreciation Ca 48.00 48.00 48.00 2017 2018 2019 34,560 34,560S 85,M0 120,000 73,680 $193,680$ 793,440 708,000 634,320 1,780 1535 Double-declining balance straight-line depreciation rate 100% divided by 10 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.) 10.00% 20% Cost of Machinery Salvage Value Depreciable amount 828,000 192,000 636,000 S S Opening Carrying Value Accumulated Year Depreciation Depreciaion Book Value 828,000 Salvage value is 828,000 $ 662,400 $ 529,920 $ 423,936 S 339,149 662,400 529,920 423,936 339,149 905,600 1,394,451 (566,451) 165,600 S 165,600 $ 132,480 298,080 $ 105,984 404,064 S 84,787 488,851 $ ( depreciation stops when book value-residual value Depreciation 2017 2018 2019 (8 months) (4 months+ 8 months 4 months +8 months 110,400 143,520 114,816

Straight-line method Cost Salvage Value 828,000 192,000 636,000 reciable Amount Z-X-Y Life in years Annual Depreciation 63,600 Depreciation Accumulated Depreciation Year Year Depreciable cost Expense 636,000 S 572,400 S 508,800 445,200 $ 381,600 S 53,600 3,00 63,600 127,200 63,600 190,800 53,600 254,400 53,600 $318,000 764,400 700,800 637,200 573,600 510,000 $ 31,800 -63600 6/12 63,600 63,600 2018 2019 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 hours Cost Salvage Value Depreciable amount 13,250 Hours 828,000 192,000 reciation per Unit 18.00 Depreciation (not impacted by no of Accumulated Actual Units of production Depreciation Value 48.00 48.00 48.00 2017 2018 2019 34,560 $34,560 35,440 120,000 73,680 $193,680$ 793,440 708,000 634,320 720 1535 Double-declining balance straight-line depreciation rate (100% divided by 10 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.) 10.00% 20% years). Cost of Machinery Salvage Value Depreciable amount 828,000 192,000 636,000 S Opening Carrying Value Accumulated Depreciation Depreciation Book Value Year 165,600 165,600 132-480 298,080 105,984 S404,064 84,787$ 488,851 $ 905,600 1,394,451 (566,451) 828,000 Salvage value is ignored 662,400 529,920 423,936 339,149 828,000 $ 662,400 S 529,920 $ 423,936 $ 339,149 ( depreciation stops when book value -residual value Depreciation 2017 2018 2019 (6 months) (6 months +6 months 6 months+6 months 82,800 149,040 119,232

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