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Diamond Company buys a specialty table saw for ts metar tw n ness on Janary (Required) Compute the depreciation expese for th
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Answer #1

A.

STRAIGHT LINE METHOD

year depriciation (cost -scrap value / year)
2019 140000
2020 140000
2021 140000

B.

DOUBLE DECLINING METHOD

double declining percentage = 100%/5 year = 20% so double declining percentage =20% * 2=40%

year DEPRICIATION cost* % of double declining closing balance
2019 300000 (750000*40%) 450000 (75000-300000)
2020 180000 (450000*40%) 270000(450000-180000)
2012 108000(270000*40%) 162000(270000-108000)

C.

when the straight line method the depriciation amount is same for each year, but the double declining method depriciation is shows redusing trend. so in the income statement when the straight method the first yer is 140000 and double system 450000 so the profit of the company is very less in that year.

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