Question

Seok Show Me How Calculator Printem Partial Year Depreciation Equipment acquired at a cost of $108,000 has an estimated residual value of $6,000 and an estimated useful le of 10 years. It was placed in service on April 1 of the current fiscal year, which ends on December 31. If necessary, round your answers to the nearest cent. a. Determine the depreciation for the current fiscal year and for the following fiscal year by the straight-line method. Depreciation Year 1 $ Year 2 b. Determine the depreciation for the current fiscal year and the following fiscal year by the double declining balance method. Depreciation Year 1 Year 2 이 AliExpress It's Singles Day! Start shopping! Check sty Work AD 440 V10/2019

Answer 1

Solution

Depreciation by Straight line

	Depreciation
Year 1	$             7,650.00
Year 2	$           10,200.00

Depreciation by DDB

Year	Double declining balance
Year 1	$          16,200.00
Year 2	$          18,360.00

Working

Straight line Method
A	Cost	$ 108,000
B	Residual Value	$ 6,000
C=A - B	Depreciable base	$ 102,000
D	Life [in years left ]	10
E=C/D	Annual SLM depreciation	$             10,200.00

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Depreciation schedule-Straight line method
Year	Book Value	Depreciation expense	Accumulated Depreciation	Ending Book Value
1	$        108,000.00	$               7,650.00	$                7,650.00	$            100,350.00
2	$        100,350.00	$             10,200.00	$             17,850.00	$              90,150.00

.

Double declining Method
A	Cost	$ 108,000
B	Residual Value	$ 6,000
C=A - B	Depreciable base	$ 102,000
D	Life [in years]	10
E=C/D	Annual SLM depreciation	$ 10,200
F=E/C	SLM Rate	10.00%
G=F x 2	DDB Rate	20.00%

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Depreciation schedule-Double declining
Year	Beginning Book Value	Depreciation rate	Depreciation expense	Accumulated Depreciation	Ending Book Value
1	$ 108,000	20.00%	$ 16,200	$ 16,200	$ 91,800
2	$ 91,800	20.00%	$ 18,360	$ 34,560	$ 73,440