NEED HELP 3) depreciation method: Straight line purchase date: 1/1/2010 cost: $225,000.00 estimated life: 20 sales...
NEED HELP
3) depreciation method: Straight line
purchase date: 1/1/2010
cost: $225,000.00
estimated life: 20
sales price: $25,000.00
date sold: 12/31/2015
a. What is the depreciation expense for yr 20 using the straight‐line method?
b. What is the net book value of the equipment at the end of year 15?
c. Calculate gain/loss on sale of equipment.
d. What is the account balance in accumulated depreciation at the end of yr 20?
e. What is the depreciation expense for yr 1 using the double declining method?
f. Assuming the equipment was purchased on June 1, 2010 and sold on 12/31/2015, what is the gain or loss on sale ?
Homework Answers
Answer:
a. Straight Line Basis = (Purchase Price of Asset - Salvage Value) / Estimated Useful Life of Asset
$(225,000-0)/20=$11,250
Under Straight line method Depreciation is same amount for all years
So Yr 20 Depreciation = $11,250
B. the net book value of the equipment at the end of year 15
Net book value is = original cost of an asset - accumulated depreciation
$225,000-$56,250=$168,750
Working:
Accumulated Depreciation for yr15=$11,250*5 years
=$56,250
c. Calculate gain/loss on sale of equipment.
Gain/loss=Sales price-Net book value of Asset
=$25,000-$168,750
Loss =$143,750
D. the account balance in accumulated depreciation at the end of yr 20
Depreciation for the year*20 years
$11,250*20=$225,000
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NEED HELP
3) depreciation method: Straight line
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