Correct Answer:
1: Straight line method:
Straight line Method |
||
A |
Cost |
$ 99,000.00 |
B |
Residual Value |
$ 5,500.00 |
C=A - B |
Depreciable base |
$ 93,500.00 |
D |
Life [in years left ] |
5 |
E=C/D |
Annual SLM depreciation |
$ 18,700.00 |
Year |
Book Value |
Depreciation expense |
Ending Book Value |
Accumulated Depreciation |
2017 |
$ 99,000.00 |
$ 18,700.00 |
$ 80,300.00 |
$ 18,700.00 |
2018 |
$ 80,300.00 |
$ 18,700.00 |
$ 61,600.00 |
$ 37,400.00 |
2019 |
$ 61,600.00 |
$ 18,700.00 |
$ 42,900.00 |
$ 56,100.00 |
2020 |
$ 42,900.00 |
$ 18,700.00 |
$ 24,200.00 |
$ 74,800.00 |
2021 |
$ 24,200.00 |
$ 18,700.00 |
$ 5,500.00 |
$ 93,500.00 |
2: Double-Declining method:
Double declining Method |
||
A |
Cost |
$ 1,10,000.00 |
B |
Residual Value |
$ 10,500.00 |
C=A - B |
$ 99,500.00 |
|
D |
Life [in years] |
4 |
E=C/D |
Annual SLM depreciation |
$ 24,875.00 |
F=E/C |
SLM Rate |
25.00% |
G=F x 2 |
DDB Rate |
50.00% |
Year |
Beginning Book Value |
Depreciation rate |
Depreciation expense |
Ending Book Value |
Accumulated Depreciation |
1 |
$ 1,10,000 |
50.00% |
$ 55,350 |
$ 54,650 |
$ 55,350 |
2 |
$ 54,650 |
50.00% |
$ 27,325 |
$ 27,325 |
$ 82,675 |
3 |
$ 27,325.00 |
50.00% |
$ 13,662.50 |
$ 13,662.50 |
$ 96,337.50 |
4 |
$ 13,662.50 |
(13662.50 - 10500) |
$ 3,162.50 |
$ 10,500.00 |
$ 99,500 |
3 :Units of Activity:
Units of Activity method |
||
A |
Cost |
$ 89,000.00 |
B |
Residual Value |
$ 8,500.00 |
C=A - B |
Depreciable base |
$ 80,500.00 |
D |
Usage in units(in Miles) |
115000 |
E |
Depreciation per Mile |
$ 0.70 |
Year |
Book Value |
Usage |
Depreciation expense |
Ending Book Value |
Accumulated Depreciation |
1 |
$ 89,000.00 |
23000 |
$ 16,100.00 |
$ 72,900.00 |
$ 16,100.00 |
2 |
$ 72,900.00 |
31000 |
$ 21,700.00 |
$ 51,200.00 |
$ 37,800.00 |
3 |
$ 51,200.00 |
30500 |
$ 21,350.00 |
$ 29,850.00 |
$ 59,150.00 |
4 |
$ 29,850.00 |
30500 |
$ 21,350.00 |
$ 8,500.00 |
$ 80,500.00 |
End of answer.
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