Sheffield Company purchases equipment on January 1, Year 1, at a cost of $570,000. The asset is expected to have a service life of 12 years and a salvage value of $51,300.
Compute the amount of depreciation for each of Years 1 through 3 using the double-declining-balance method.
Under double declining balance method,
Depreciation per annum = 2 x straight line depreciation percentage x book value at the beginning of period
And,
Straight line depreciation percentage = 100%/useful life = 100%/12 = 8.33%
Therefore,
For year 1:
Book value in the beginning = $570000
Depreciation expenses = 2 x 8.33% x $570000 = $95019
Book value at the end = $474981
For year 2:
Book value in the beginning = $474981
Depreciation expenses = 2 x 8.33% x $474981= $79179.33
Book value at the end = $395801.67
For year 3:
Book value in the beginning = $395801.67
Depreciation expenses = 2 x 8.33% x $395801.67 = $65980.14
Book value at the end = $329821.53
Sheffield Company purchases equipment on January 1, Year 1, at a cost of $570,000. The asset...
Sheffield Company purchases equipment on January 1, Year 1, at a cost of $570,000. The asset is expected to have a service life of 12 years and a salvage value of $51,300. * Your answer is incorrect. decimal Compute the amount of depreciation for each of Years 1 through 3 using the straight-line depreciation method. (Round answers to places, e.g. 5,125.) Depreciation for Year 1 $ 47310 43383 Depreciation for Year 2 $ Depreciation for Year 3 $ 39782 eTextbook...
Sheffield Company purchases equipment on January 1, Year 1, at a cost of $570,000. The asset is expected to have a service life of 12 years and a salvage value of $51.300. Compute the amount of depreciation for each of Years 1 through 3 using the straight-line depreciation method. (Round answers to decimal places, eg. 5,125.) Depreciation for Year 1 $ Depreciation for Year 2 $ $ Depreciation for Year 3 e Textbook and Media Compute the amount of depreciation...
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