Question

Droblem 9.2B R&R Company purchased a new machine on 1 September 2010, at a cost of $180.000. The machine's estimated useful life at the time of the purchase was five years, and its residual value was $10,000. R&R adopts the cost model as its accounting policy in subsequently measuring its property, plant, and equipment. Instructions S 1 22 GOD a. Prepare a complete depreciation schedule, beginning with calendar year 2010, under each of the methods listed below (assume that the half-year convention is used): 1. Straight-line. 2. 200 percent declining-balance. 3. 150 percent declining-balance (not switching to straight-line).

Answer 1

a. See picture attached

B C D E F G H I J K L M N O P 1 a. Straight line method 3 Asset value 4 Less: salvage value 5 Depreciable value 6 Useful life 7 Depreciation per annum 180,000 (10,000) 170,000 34,000 9 Assuming half year convention in 2010 10 Year 2010 2011 2012 2013 2014 2015 11 Depreciation 17,000 34,000 34,000 34,000 34,000 17,000 12 13 b. 200% reducing balance 14 In this method, the depreciable asset value is depreciated by 200% divided by useful life i.e 5 years, depreciation of 40% per annum 2018 3,807 (1,523) 2,284 2019 2,284 (914) 1,371 2020 1,371 (548) 8 22 2021 822 (329) 4 93 2022 493 (197) 296 2023 296 (118) 178 2024 178 (71) 107 16 Year 2010 2011 2012 2013 2014 2015 2016 2017' 17 Asset value 170,000 136,000 81,600 48,960 29,376 17,626 10,575 6,345 18 Less: Depreciation during the period (19,584) (11,750) (7,050) (4,230) (2,538) 19 Net asset value at the end 136,000 81,600 48,960 29,376 17,626 10,575 6,345 3,807 20 21 c. 150% reducing balance 22 in this method, the depreciable asset value is depreciated by 150% divided by useful life i.e 5 years, depreciation of 30% per annum 24 Year 2010 2011 2012 2013' 2014' 2015 2016 2017 25 Opening asset value 170,000 144,500 101,150 70,805 49,564 34,694 24,286 17,000 26 Less: Depreciation during the period (25,500) (43,350) (30,345) (21,242) (14,869) (10,408) (7,286) (5,100) 27 Closing net asset value 144,500 101,150 70,805 49,564 34,694 24,286 17,000 11,900 2018 11,900 (3,570) 8,330 8 2019 ,330 (2,499) 5,831 2020 5,831 (1,749) 4,082 2021 4,082 (1,225) 2,857 2022 2,857 (857) 2,000 2023' 2,000 (600) 1,400 2024 1,400 (420) 980

b. The most commonly used method of depreciation is straight line method due to its ease of application and accounting.

c. Please upload the question separately, we have a maximum limit on sub questions of a question