Question

4. The initial cost of purchasing a device is $12,000. The salvage value of the device at the end of four years is $3,500. Compute the depreciation schedule for the device by the following methods: Straight-line depreciation (5 pts) Sum-of-years'-digits depreciation (10 pts) ii ii CCA depreciation as a Class 43 asset (10 pts) iv CCA depreciation as a Class 29 asset (10 pts)

Answer 1

Answers 1. Pageino o 0 Given that .. The initial cost of purchasing a device = $12000 The salvage value of device at the end of 4 you is $3500 Dagnieciation schedule to the device poing straight - Home dhe pareciation method :- Thitial comot - Salvage value Depreciation amount = lor of years 12000 - 3500 8500 = $2125 Book value start Year Net book value Depreciation amount $9875 $12000 $9875 $2125 $2125 $7750 $4750 $ 2125 $5625 $ 5625 $2125 $ 3500

- Page No @ In above, Net book value = Book value steunt - depreciation amount Book value start = Previous year het book value Depreciation schedule for the device using some of the most diales depreciation method :- Depreciation coof - 10000 - 3500 = $ 8500 Book value sfout - Previour year het hook value Depreciation amoont = Depreciation corot x depreciation rate Net book value = Book value start – depreciation anocht Depreciation wrate for year I = 40% fins al = 407) Year a : 307 Year 3 - 90% Year 4 = 10 Depreciation Depreciation Depreciation Net book I rate amount $12000 $8500 · 40% $3400 8600 $8600 8500 30% $ 2550 $ 6050 $6050 $8500 20% $1400 $ 4350 $ 4350 $8500 10% $850 $ 3500 យ Book value start 1 com value 2 w I

Page, No ③ a) Depreciation schedule for the device using cardbold cost allowance class 42 casoek method :~ In this case Depreciation rate = 30% Book value start = Previous net book value Depreciation amount = Book value start X depreciation rate Klets. book value = Book value start a depreciation amount Book rolue Depreciation Depreciation Year Net book value amount $12000 30 % $3600 $ 8400 48400 30% + 2 520 5880 $ 5880 $1964 $ 4116 $4116 30% $1a3418 $2881 start rate بلا 30% لے Depreciation Schedule the devices wing capital Cost Allo wance as pest class c29 asset method :- . In this case, depreciation to be written of straight line method in 3 years at 25%, 50% & 254.. The vremaining depreciation is in latter years.

Page No 4 book value depreciation start I rate Depreciation Net book value amount - $12000 $9875 $5625 254 504. ee $2125 $4250 $ 2125 $9875 $ 5605 257 $ 3500 w I $3500 $ 3500 Yeau, depreciation amount = (18000 - 3500) x 25%. = $500X25% $2125 Year o, depreciation amount = $500 x 50%. = $4250 Year 3, depreciation amount = 8500 X 25% = $2125 Nets book value = Book value sfant - Depreciation amount Book vanda sfart - Previous year nets book value