Homework Answers
Answer:
| Annual depreciation | $16,329 |
| Carrying Amount | $101,290 |
Detailed Explanation:
| Date of purchase | 1-Jan-15 |
| Cost of equipment | $173,030 |
| Estimated useful life | 10 years |
| Residual value | $9,740 |
| Method of depreciation | Straight Line Method |
Annual Depreciation= (Cost- Residual Value)/Estimated useful life
=($ 173,030 - $ 9,740)/10
=$ 16,329
Written Down Value of the Asset as on December 31, 2018= $ 173,030- ($16,329*4)=$107,714
| Recoverable amount as on December 31, 2018 | $101,290 |
In cases of impairment, the carrying amount is always the lower of the recoverable amount and Written Down Value of the Asset to represent the correct value of the asset on a given date (here December 31, 2018).
Therefore, the carrying amount as on December 31, 2018 is $101,290.
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