Solution
Straight line method
Depreciation expense | |
Depreciation for 2017 | $ 29,783* |
Depreciation for 2018 | $ 39,711 |
*39711/12 x 9
Double declining method
Depreciation expense | |
Depreciation for 2017 | $ 65,057 |
Depreciation for 2018 | $ 80,236 |
Working
Straight line Method | ||
A | Cost | $ 867,420 |
B | Residual Value | $ 73,200 |
C=A - B | Depreciable base | $ 794,220 |
D | Life [in years left ] | 20 |
E=C/D | Annual SLM depreciation | $ 39,711 |
.
Double declining Method | ||
A | Cost | $ 867,420 |
B | Residual Value | $ 73,200 |
C=A - B | Depreciable base | $ 794,220 |
D | Life [in years] | 20 |
E=C/D | Annual SLM depreciation | $ 39,711 |
F=E/C | SLM Rate | 5.00% |
G=F x 2 | DDB Rate | 10.00% |
.
Depreciation schedule-Double declining | |||||
Year | Beginning Book Value | Depreciation rate | Depreciation expense | Accumulated Depreciation | Ending Book Value |
2017 | $ 867,420 | 10.00% | $ 65,057 | $ 65,057 | $ 802,364 |
2018 | $ 802,364 | 10.00% | $ 80,236 | $ 145,293 | $ 722,127 |
Exercise 11-3 Buffalo Company purchased a new plant asset on April 1, 2017, at a cost...
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