Enterprise Productions Inc. purchased a copier on Jan 1, 20X1 for $10,100 with a residual value...
Enterprise Productions Inc. purchased a copier on Jan 1, 20X1 for $10,100 with a residual value of $1,400.
The copier has a useful life of 5 years or 100,000 copies.
Enterprise Productions, Inc. produced 15,000 copies in 20X1 and 16,000 copies in 20X2.
Use the double declining balance method of depreciation to compute the following:
a) The Depreciation Expense in 20X1?
b) The Depreciation Expense in 20X2?
c) Accumulated depreciation at the end of 20X2?
d) Book value at the end of 20X2?
Homework Answers
Requirement a: Depreciation Expense in 20X1
Depreciation expense = Net book value x (2 ÷ useful life)
= $10,100 x 2/5
= $10,100 x 0.40
=$4,040
Requirement b: Depreciation Expense in 20X2
Depreciation expense = Net book value x (2 ÷ useful life)
= ($10,100-$4,040) x 2/5
= $6,060 x 0.40
=$2,424
Requirement c: Accumulated depreciation at the end of 20X2
Accumulated depreciation = Depreciation expense for 20X1 + Depreciation expense for 20X2
= $4,040+$2,424
=$6,464
Requirement d: Book value at the end of 20X2
Book value = Original cost - Accumulated depreciation
= $10,100 - $6,464
=$3,636
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