Question

Problem 9-09A Ayayai Corporation purchased machinery on January 1, 2022, at a cost of $296,000. The estimated useful life of the machinery is 4 years, with an estimated salvage value at the end of that period of $34,600. The company is considering different depreciation methods that could be used for financial reporting purposes. Your answer is partially correct. Try again. Prepare separate depreciation schedules for the machinery using the straight-line method, and the declining-balance method using double the straight-line rate. STRAIGHT-LINE DEPRECIATION Computation End of Year Years Depreciable Cost x Depreciation Rate = Annual Depreciation Expense Accumulated Depreciation Book Value 2022 261400 65350 65350 230650 X ERRERERE 2023 65350 130700 165300 2024 65350 196050 196050) 99950 2025 65350 34600 261400

Answer 1

Straight-Line Method:

STRAIGHT-LINE DEPRECIATION End of Year Computation Annual Accumulated Depreciable Depreciation Book Value Years Depreciation Depreciation 65,350 $ 65,350 $ 65,350 $ 65,350 $ Cost Rate 65,350 $ 130,700 $ 196,050 $ 261,400 $ $ $ 261,400 2022 261,400 25% 230,650 25% 2023 165,300 261,400 25% 2024 99,950 25% 2025 261,400 34,600 Total 261,400 Depreciable Cost Cost of Machine - Salvage Value Depreciable Cost $296,000 $34,600 Depreciable Cost = $261,400 Depreciation Rate 1/Useful Life Depreciation Rate 1/4 Depreciation Rate 25%

Double-Declining Method:

DOUBLE-DECLINING-BALANCE METHOD End of Year Computation Accumulated Annual Ending Book Beginning Depreciation Years Depreciation Depreciation 148,000 $ 74,000$ 37,000 $ 2,400 $ Book Value Value Rate 148,000 $ 222,000 $ 259,000 $ 2022 296,000 50% 148,000 50% 74,000 2023 148,000 74,000 50% 2024 37,000 34,600 2025 261,400 37,000 Total 261,400 Depreciation Rate 2/Useful Life Depreciation Rate 2/4 Depreciation Rate 50%