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Send to Gradebook < Prev Next Question 6 View Policies Current Attempt in Progress Sheffield Company purchased equipment for

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Answer #1

(a) Straight line Depreciation = (Original Value - Salvage Value) / Useful Life
= ($237200 - 14000) / 8 = $27900

Depreciation for 2020 = $27900 / 12 x 3 = $6975

(b) Activity Method = (Original Value - Salvage Value) / Estimated Production
= ($237200 - 14000) / 36000 = $6.20 per unit

Depreciation for 2020 = 1000 x $6.20 = $6200

(c) Activity Method = (Original Value - Salvage Value) / Estimated Working hours
= ($237200 - 14000) / 20000 = $11.16 per unit

Depreciation for 2020 = 500 x $11.16 = $5580

(d) Sum of Year Method
Depreciation for 2022 = ($237200 - 14000) x 4/15 x 9/12 + ($237200 - 14000) x 3/15 x 3/12 = $55800

(e) Double Declining Method
Depreciation for 2020 = $237200 x 40% x 3/12 = $23720
Depreciation for 2021 = ($237200 - $23720) x 40% = $85392

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