Homework Answers
| a. | Units of activity | |||||
| Year | Book Value year start | units of activity | Annul Dep. Exp. | Acc. Dep | Book Value | |
| 2020 | $39,000 | 5,700 | $8,879 | $8,879 | $30,121 | |
| 2021 | $30,121 | 5,000 | $7,789 | $16,668 | $22,332 | |
| 2022 | $22,332 | 4,800 | $7,477 | $24,146 | $14,854 | |
| 2023 | $14,854 | 4,400 | $6,854 | $31,000 | $8,000 | |
| 19,900 | ||||||
| Depreciation per hour = ($39,000 - $8,000)/19,900 = $1.5578 per hour | ||||||
| Straight-line | ||||||
| Year | Book Value year start | Depreciation Life | Annul Dep. Exp. | Acc. Dep | Book Value | |
| 2020 | $39,000 | 4 | $7,750 | $7,750 | $31,250 | |
| 2021 | $31,250 | 4 | $7,750 | $15,500 | $23,500 | |
| 2022 | $23,500 | 4 | $7,750 | $23,250 | $15,750 | |
| 2023 | $15,750 | 4 | $7,750 | $31,000 | $8,000 | |
| Depreciation per year = ($39,000 - $8,000)/4 years = $7,750 per hour | ||||||
| Double declining balance | ||||||
| Year | Book Value year start | Depreciation Rate | Annul Dep. Exp. | Acc. Dep | Book Value | |
| 2020 | $39,000 | 50.00% | $19,500 | $19,500 | $19,500 | |
| 2021 | $19,500 | 50.00% | $9,750 | $29,250 | $9,750 | |
| 2022 | $9,750 | 17.95% | $1,750 | $31,000 | $8,000 | |
| 2023 | $8,000 | $0 | $31,000 | $8,000 | ||
| Sum-of the years' digit | ||||||
| Year | Book Value year start | Depreciation Rate | Annul Dep. Exp. | Acc. Dep | Book Value | |
| 2020 | $39,000 | 40.00% | $12,400 | $12,400 | $26,600 | |
| 2021 | $26,600 | 30.00% | $9,300 | $21,700 | $17,300 | |
| 2022 | $17,300 | 20.00% | $6,200 | $27,900 | $11,100 | |
| 2023 | $11,100 | 10.00% | $3,100 | $31,000 | $8,000 | |
| b. | year 1 | year 2 | ||||
| Straight-line | $7,750 | $7,750 | ||||
| Double declining balance | $19,500 | $9,750 | ||||
| Sum-of the years' digit | $12,400 | $9,300 | ||||
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