On January 4, 2019, Columbus Company purchased new equipment for
$693,000 that had a useful life of four years and a salvage value
of $53,000.
Required:
Prepare a schedule showing the annual depreciation and end-of-year
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.
Analyze:
If the double-declining balance method is used to compute
depreciation, what would be the book value of the asset at the end
of 2020?
Homework Answers
1)
| STRAIGHT-LINE METHOD | ||||||
| Year | Acquisition Cost | Salvage Value | Useful Life | Annual Depreciation | Accumulated Depreciation | |
| 2019 | $693000 | 53000 | 4 | years | $160000 | $160000 |
| 2020 | $693000 | 53000 | 4 | years | 160000 | (160000+160000)= 320000 |
| 2021 | $693000 | 53000 | 4 | years | 160000 | (320000+160000)= 480000 |
Depreciation expense= (Acquisition cost-Salvage value)/Useful life
= $(693000-53000)/4= $160000
2) Sum of Years' digit= 4+3+2+1= 10
Cost less salvage= $693000-53000= $640000
| SUM-OF-THE-YEARS'-DIGIT METHOD | ||||
| Year | Fraction | Cost Less Salvage | Annual Depreciation | Accumulated Depreciation |
| 2019 | 4/10 | $640000 | (640000*4/10)= $256000 | $256000 |
| 2020 | 3/10 | 640000 | (640000*3/10)= 192000 | (256000+192000)= 448000 |
| 2021 | 2/10 | 640000 | (640000*2/10)= 128000 | (448000+128000)= 576000 |
3) Depreciation rate= 100*2/4= 50%
| DOUBLE-DECLINING-BALANCE METHOD | ||||
| Year | Beginning Book Value | Rate | Annual Depreciation | Accumulated Depreciation |
| 2019 | $693000 | 50% | (693000*50%)= $346500 | $346500 |
| 2020 | (693000-346500)= 346500 | 50% | (346500*50%)= 173250 | (346500+173250)= 519750 |
| 2021 | (693000-519750)= 173250 | 50% | (173250*50%)= 86625 | (519750+86625)= 606375 |
4) Book value at the end of 2019= Beginning Book Value at the starting of 2019-Accumulated Depreciation at the end of 2020
= $693000-519750
= $173250
Add Answer to:
On January 4, 2019, Columbus Company purchased new equipment for
$693,000 that had a useful life...
P M Gmail Youtube Maps er 18 Homework Problem 18.2A Using different depreciation methods and comparing...
P M Gmail Youtube Maps er 18 Homework Problem 18.2A Using different depreciation methods and comparing the results. LO 18-2 On January 4, 2019. Columbus Company purchased new equipment for $633,000 that had a useful life of four years and a salvage value of $43,000. Required: Prepare a schedule showing the annual depreciation and end-of-year 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. Analyze:...
Depreciation Methods Gruman Company purchased a machine for $198,000 on January 2, 2019. It made the...
Depreciation Methods Gruman Company purchased a machine for $198,000 on January 2, 2019. It made the following estimates: Service life 5 years or 10,000 hours Production 180,000 units Residual value $ 18,000 In 2019, Gruman uses the machine for 2,000 hours and produces 45,000 units. In 2020, Gruman uses the machine for 1,400 hours and produces 34,000 units. If required, round your final answers to the nearest dollar. Required: Compute the depreciation for 2019 and 2020 under each of the...
Preparing Depreciation Schedules Using Various Depreciation Methods Frito Inc. acquired equipment on January 1, 2020, at...
Preparing Depreciation Schedules Using Various Depreciation Methods Frito Inc. acquired equipment on January 1, 2020, at a cost of $12,000 that is estimated to have a useful life of five years and a residual value of $3,000. Required Prepare a depreciation schedule showing annual depreciation expense and year-end accumulated depreciation and book value over the life of the asset using the following methods. a. Straight-line method. b. Sum-of-the-years'-digits method. C. Double-declining-balance method. Straight-line Sum-of-the-years'-digits Double-declining balance c. Double-Declining-Balance Depreciation Method...
Preparing Depreciation Schedules Using Various Depreciation Methods Frito Inc. acquired equipment on January 1, 2020, at...
Preparing Depreciation Schedules Using Various Depreciation Methods Frito Inc. acquired equipment on January 1, 2020, at a cost of $12,000 that is estimated to have a useful life of five years and a residual value of $3,000. Required Prepare a depreciation schedule showing annual depreciation expense and year-end accumulated depreciation and book value over the life of the asset using the following methods. a. Straight-line method. b. Sum-of-the-years'-digits method. c. Double-declining-balance method. Straight-line Sum-of-the-years'-digits Double-declining balance a. Straight-Line Depreciation Method...
On July 1, 2020, Swifty Company purchased for $6,120,000 snow-making equipment having an estimated useful life...
On July 1, 2020, Swifty Company purchased for $6,120,000 snow-making equipment having an estimated useful life of 5 years with an estimated salvage value of $255,000. Depreciation is taken for the portion of the year the asset is used. Complete the form below by determining the depreciation expense and year-end book values for 2020 and 2021 using the 1. sum-of-the-years'-digits method. 2. double-declining balance method. 2020 2021 Sum-of-the-Years'-Digits Method Equipment Less: Accumulated Depreciation $6,120,000 $6,120,000 Year-End Book Value $6,120,000 $6,120,000...
On July 1, 2020, Martinez Company purchased for $4,680,000 snow-making equipment having an estimated useful life...
On July 1, 2020, Martinez Company purchased for $4,680,000 snow-making equipment having an estimated useful life of 5 years with an estimated salvage value of $195,000. Depreciation is taken for the portion of the year the asset is used Complete the form below by determining the depreciation expense and year-end book values for 2020 and 2021 using the 1. sum-of-the-years'-digits method 2. double-declining balance method 2020 2021 Sum-of-the-Years'-Digits Method Equipment $4,680,000 $4,680,000 Less: Accumulated Depreciation Year-End Book Value Depreciation Expense...
Preparing Depreciation Schedules Using Various Depreciation Methods Frito Inc. acquired equipment on January 1, 2020, a...
Preparing Depreciation Schedules Using Various Depreciation Methods Frito Inc. acquired equipment on January 1, 2020, at a cost of $12,000 that is estimated to have a useful life of five years and a residual value of $3,000 Required Prepare a depreciation schedule showing annual depreciation expense and year-end accumulated depreciation and book value over the life of the asset using the following methods. a. Straight-line method. b. Sum-of-the-years'-digits method. c. Double-declining-balance method. Straight-line Sum-of-the-years'-digits Double-declining balance b. Sum-of-the-Years'-Digits Depreciation Method...
Malone Delivery Company purchased a new delivery truck for $54,000 on April 1, 2019. The truck...
Malone Delivery Company purchased a new delivery truck for $54,000 on April 1, 2019. The truck is expected to have a service life of 10 years or 150,000 miles and a residual value of $3,000. The truck was driven 10,000 miles in 2019 and 20,000 miles in 2020. Malone computes depreciation expense to the nearest whole month. Required: Compute depreciation expense for 2019 and 2020 using the following methods: (Round your answers to the nearest dollar.) Straight-line method 2019 $...
Hightower Company acquired an asset on January 2, 2019, at a cost of $154,000. The asset’s...
Hightower Company acquired an asset on January 2, 2019, at a cost of $154,000. The asset’s useful life is four years and its salvage value is $52,000. Compute the depreciation expense for each of the first two years, using the straight-line method, the double-declining-balance method, and the sum-of-the-years’-digits method. Compute the depreciation expense for the first two years, using the straight-line method. STRAIGHT-LINE METHOD Year Acquisition Cost Salvage Value Useful Life Depreciation Accumulated Depreciation 1 years 2 years DOUBLE-DECLINING-BALANCE METHOD...
Sarasota Corporation purchased machinery on January 1, 2022, at a cost of $280,000. The estimated useful...
Sarasota Corporation purchased machinery on January 1, 2022, at a cost of $280,000. The estimated useful life of the machinery is 4 years, with an estimated salvage value at the end of that period of $33,000. The company is considering different depreciation methods that could be used for financial reporting purposes. 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 Years Depreciable Cost x Depreciation Rate...
P M Gmail Youtube Maps er 18 Homework Problem 18.2A Using different depreciation methods and comparing the results. LO 18-2 On January 4, 2019. Columbus Company purchased new equipment for $633,000 that had a useful life of four years and a salvage value of $43,000. Required: Prepare a schedule showing the annual depreciation and end-of-year 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. Analyze:...
Preparing Depreciation Schedules Using Various Depreciation Methods Frito Inc. acquired equipment on January 1, 2020, at a cost of $12,000 that is estimated to have a useful life of five years and a residual value of $3,000. Required Prepare a depreciation schedule showing annual depreciation expense and year-end accumulated depreciation and book value over the life of the asset using the following methods. a. Straight-line method. b. Sum-of-the-years'-digits method. C. Double-declining-balance method. Straight-line Sum-of-the-years'-digits Double-declining balance c. Double-Declining-Balance Depreciation Method...
Preparing Depreciation Schedules Using Various Depreciation Methods Frito Inc. acquired equipment on January 1, 2020, at a cost of $12,000 that is estimated to have a useful life of five years and a residual value of $3,000. Required Prepare a depreciation schedule showing annual depreciation expense and year-end accumulated depreciation and book value over the life of the asset using the following methods. a. Straight-line method. b. Sum-of-the-years'-digits method. c. Double-declining-balance method. Straight-line Sum-of-the-years'-digits Double-declining balance a. Straight-Line Depreciation Method...
On July 1, 2020, Swifty Company purchased for $6,120,000 snow-making equipment having an estimated useful life of 5 years with an estimated salvage value of $255,000. Depreciation is taken for the portion of the year the asset is used. Complete the form below by determining the depreciation expense and year-end book values for 2020 and 2021 using the 1. sum-of-the-years'-digits method. 2. double-declining balance method. 2020 2021 Sum-of-the-Years'-Digits Method Equipment Less: Accumulated Depreciation $6,120,000 $6,120,000 Year-End Book Value $6,120,000 $6,120,000...
On July 1, 2020, Martinez Company purchased for $4,680,000 snow-making equipment having an estimated useful life of 5 years with an estimated salvage value of $195,000. Depreciation is taken for the portion of the year the asset is used Complete the form below by determining the depreciation expense and year-end book values for 2020 and 2021 using the 1. sum-of-the-years'-digits method 2. double-declining balance method 2020 2021 Sum-of-the-Years'-Digits Method Equipment $4,680,000 $4,680,000 Less: Accumulated Depreciation Year-End Book Value Depreciation Expense...
Preparing Depreciation Schedules Using Various Depreciation Methods Frito Inc. acquired equipment on January 1, 2020, at a cost of $12,000 that is estimated to have a useful life of five years and a residual value of $3,000 Required Prepare a depreciation schedule showing annual depreciation expense and year-end accumulated depreciation and book value over the life of the asset using the following methods. a. Straight-line method. b. Sum-of-the-years'-digits method. c. Double-declining-balance method. Straight-line Sum-of-the-years'-digits Double-declining balance b. Sum-of-the-Years'-Digits Depreciation Method...
Sarasota Corporation purchased machinery on January 1, 2022, at a cost of $280,000. The estimated useful life of the machinery is 4 years, with an estimated salvage value at the end of that period of $33,000. The company is considering different depreciation methods that could be used for financial reporting purposes. 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 Years Depreciable Cost x Depreciation Rate...
Most questions answered within 3 hours.
-
A crate slides up a frictionless slope. At the end of 3 seconds
its velocity is...
asked 8 minutes ago -
Use the following information to answer the next seven
questions.
Suppose there are three potential states...
asked 3 minutes ago -
If we only have interstitial and substitutional diffusion, then
what do we consider the process of...
asked 19 minutes ago -
You look at yourself in a shiny 9.6-cm-diameter Christmas tree
ball.
If your face is 21.0...
asked 21 minutes ago -
If we were to measure the relaxation time of a muscle after
undergoing tetanus compared to...
asked 21 minutes ago -
4CO(g) + 8H2(g) -----> 3CH4(g) +
CO2(g) + 2H2O(l)
Use the following data as needed to...
asked 24 minutes ago -
without using map
1. Write a C++ program to find out the top 10 words in...
asked 38 minutes ago -
1)Calculate the percent ionization of a
0.330 M solution of hypochlorous
acid.
% Ionization = %...
asked 40 minutes ago -
1a) How many grams of K2SO4 are in 250mL
of 0.11 M K2SO4 solution?
_____ g...
asked 31 minutes ago -
The vapor pressure of a solution containing 38.7 g glycerin
(C3H8O3) in 146.2 g ethanol (C2H5OH)...
asked 36 minutes ago -
A physics major is cooking breakfast when he notices that the
frictional force between the steel...
asked 41 minutes ago -
A cyclohexane (c-hex) solution is prepared by fully dissolving
9.11g of a newly synthesized organic compound...
asked 47 minutes ago