Homework Answers
|
Year |
Depreciation for the Period |
End of Period |
|||
|
Beginning of Period Book Value |
Depreciation Rate |
Depreciation Expense |
Accumulated Depreciation |
Book Value |
|
|
1 |
$700,000 |
40% |
$70,000 |
$70,000 |
$630,000 |
|
2 |
$630,000 |
40% |
$252,000 |
$322,000 |
$378,000 |
|
3 |
$378,000 |
40% |
$151,200 |
$473,200 |
$226,800 |
|
4 |
$226,800 |
40% |
$90,720 |
$563,920 |
$136,080 |
Note:
1)Depreciation Rate under Straight Line Method = (1/Useful Life) x 100 = 1/5 x 100 = 20% p.a.
Depreciation Rate under Double Declining Balance Method = 2 x Depreciation Rate under Straight Line Method = 2 x 20% = 40% p.a.
2)For Current Year, that is Year 1, Depreciation has to be calculated for the remaining 3 months of that year. Therefore,
Depreciation for Year 1 = $700,000 x 40% x 3/12 = $70,000
Add Answer to:
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$693,000 that had a useful life of four years and a salvage value
of $53,000.
Required:
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accumulated depreciation for the first three years of the asset’s
life under the straight-line method, the sum-of-the-years’-digits
method, and the double-declining-balance method.
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