not sure where to start on this
Homework Answers
| Answer 1 | ||||
| SM rate = 1/5 = 20 % | ||||
| DDB rate = 20 * 2 = 40 % | ||||
| salaveg value is ignored . | ||||
| DDB dep. For 2016 = 8700 * 40 % = 3480 | ||||
| DDB dep. For 2017 = ( 8700 -3480 ) * 40 % * 10 / 12 = 1740 | ||||
| SO, the book value on oct. 31, 2017 = | ||||
| 8700 - 3480 - 1740 = $ 3480 | ||||
| Sold for $ 2500 | ||||
| Sale proceeds - Book value = Gain ( loss ) on sale | ||||
| 2500 - 3480 = ( 980 ) loss | ||||
| Answer 2 | ||||
| Amortisation exp. ( 26700 / 3 years ) | 8900 | |||
| Accumulated amortisation / Patent ( whichever account you use ) | 8900 | |||
| Here 3 years is used since we take lesser of useful life and legal life | ||||
| for amortising. | ||||
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