1a. | Straight Line method:- | ||||
Depreciation expense | = | (Cost - Residual value) / useful Value | |||
= | ($56700 - $3000) / 3 years | ||||
= | $ 17,900 | per year | |||
Depreciation expense | Cost | Accumulated depreciation | Book value | ||
1 | $ 17,900 | $ 56,700 | $ 17,900 | $ 38,800 | |
2 | $ 17,900 | $ 56,700 | $ 35,800 | $ 20,900 | |
3 | $ 17,900 | $ 56,700 | $ 53,700 | $ 3,000 | |
Total | $ 53,700 | ||||
1b. | Units of production method:- | ||||
Depreciation expense | = | (Cost - Residual value) / useful Value in hours | |||
= | ($56700 - $3000) / 264000 | ||||
= | $ 0.20 | ||||
Depreciable units | Depreciation per unit | Depreciation expense | |||
1 | 63,360 | $ 0.20 | $ 12,888 | ||
2 | 1,45,200 | $ 0.20 | $ 29,535 | ||
3 | 55,440 | $ 0.20 | $ 11,277 | ||
Total | 2,64,000 | $ 53,700 | |||
Depreciation expense | Cost | Accumulated depreciation | Book value | ||
1 | $ 12,888 | $ 56,700 | $ 12,888 | $ 43,812 | |
2 | $ 29,535 | $ 56,700 | $ 42,423 | $ 14,277 | |
3 | $ 11,277 | $ 56,700 | $ 53,700 | $ 3,000 | |
Total | $ 53,700 | ||||
1c. | Double - declining balance method:- | ||||
Double declining rate | = | (100%/ 3 years) X 2 | |||
= | 67% | ||||
Beginning of period book value | Depreciation rate | Depreciation expense | Accumulated depreciation | Book value | |
1 | $ 56,700 | 67% | $ 37,800 | $ 37,800 | $ 18,900 |
2 | $ 18,900 | 67% | $ 12,600 | $ 50,400 | $ 6,300 |
3 | $ 6,300 | 67% | $ 3,300 | $ 53,700 | $ 3,000 |
(bal fig.) | |||||
Total | $ 53,700 |
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