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Marigold Corporation | ||||||||
Cost of Machinery | 266,000.00 | A | ||||||
Residual Value | 31,600.00 | B | ||||||
Depreciable Cost | 234,400.00 | C=A-B | ||||||
Straight Line Depreciation | ||||||||
Straight Line Method | Computation | End of Year | ||||||
Depreciable Value | 234,400.00 | See C | Years | Depreciable Cost | Depreciation rate | Annual depreciation Expense | Accumulated depreciation | Net Book Value |
Life | 4.00 | D | Year 2022 | 234,400.00 | 25.00% | 58,600.00 | 58,600.00 | 207,400.00 |
Annual depreciation | 58,600.00 | E=C/D | Year 2023 | 234,400.00 | 25.00% | 58,600.00 | 117,200.00 | 148,800.00 |
Depreciation rate | 25.00% | F=E/C | Year 2024 | 234,400.00 | 25.00% | 58,600.00 | 175,800.00 | 90,200.00 |
Year 2025 | 234,400.00 | 25.00% | 58,600.00 | 234,400.00 | 31,600.00 | |||
Total | 234,400.00 | |||||||
Double Declining Balance Depreciation | ||||||||
Double Declining Method | Computation | End of Year | ||||||
Cost of Equipment | 266,000.00 | See A | Years | Depreciable Cost | Depreciation rate | Annual depreciation Expense | Accumulated depreciation | Net Book Value |
Life | 4.00 | See D | Year 2022 | 266,000.00 | 50.00% | 133,000.00 | 133,000.00 | 133,000.00 |
Annual depreciation | 66,500.00 | J=A/D | Year 2023 | 133,000.00 | 50.00% | 66,500.00 | 199,500.00 | 66,500.00 |
Depreciation rate | 25.00% | K=J/A | Year 2024 | 66,500.00 | 50.00% | 33,250.00 | 232,750.00 | 33,250.00 |
Double Depreciation % | 50.00% | L=K*2 | Year 2025 | 1,650.00 | 234,400.00 | 31,600.00 | ||
Total | 234,400.00 | |||||||
Depreciation expense for 2025 is under Double Declining Balance is adjusted so the ending book value is equal to salvage value. | ||||||||
Highest income will arrive when depreciation is lowest. Lowest Depreciation in 2022 is under Straight Line Method. So Straight Line Method will result in Highest income in 2022. | ||||||||
Lowest income will arrive when depreciation is highest. Highest Depreciation in 2022 is under Double Declining Method. So Double Declining Method will result in Lowest income in 2022. | ||||||||
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