Question

i need to know by using this info and sloving for the following questions to fill in the blanks.

DEFGH STUDENT NAME ACCOUNTING 2113 (FINANCIAL ACCOUNTING) DEPRECIATION CALCULATIONS CHERYLL'S FURNITURE COMPANY For the Year Ended December 31, 2019 Asset Acquisition The following Assets were acquired on January 1, 2019 by Cheryll's Furniture Company during the current year: A 6 7 useful 9 . 10 11 ASSET 12 Computer System 13 Manufacturing Equipment 14 Delivery Truck de Estimated Useful Life 5 Years 8 Years 3 Years TOTAL COST $95,000 500,000 45,000 Estimated Salvage Value $12,500 25,000 4,500 15 Total $640,000 17 - Estimated Useful Life In Activity as follows: 18 Computer System 100,000 Hours 20 Delivery Truck 202,500 Miles 21

Answer 1

1.

STRAIGHT LINE METHOD

COMPUTER SYSTEM

Depreciation = (cost of asset -estimated salvage value)/useful life of asset

Depreciation = (95,000 - 12,500)/5

Depreciation (Year 1 to Year 3)= $16,500

MANUFACTURING EQUIPMENT

Depreciation = (cost of asset -estimated salvage value)/useful life of asset

Depreciation = (500,000 - 25,000)/8

Depreciation (Year 1 to Year 3)= $59,375

DELIVERY TRUCK

Depreciation = (cost of asset -estimated salvage value)/useful life of asset

Depreciation = (45,000 - 4,500)/3

Depreciation (Year 1 to Year 3)= $13,500

DOUBLE DECLINING METHOD

Depreciation Rate = (1/useful life) *100 *2

COMPUTER SYSTEM

Depreciation Rate = (1/5)*100*2 = 40%

Depreciation in Year 1 = Cost of asset * depreciation rate

Depreciation in Year 1 = 95,000*40% = $38,000

Depreciation in Year 2 = (95,000 - 38,000)*40% = $22,800

Depreciation in Year 3 = (95,000 - 38,000 - 22,800)*40% = $13,680

MANUFACTURING EQUIPMENT

Depreciation Rate = (1/8)*100*2 = 25%

Depreciation in Year 1 = Cost of asset * depreciation rate

Depreciation in Year 1 = 500,000*25% = $125,000

Depreciation in Year 2 = (500,000 - 125,000)*25% = $93,750

Depreciation in Year 3 = (500,000 - 125,000 - 93,750)*25% = $70,313

DELIVERY TRUCK

Depreciation Rate = (1/3)*100*2 = 66.667%

Depreciation in Year 1 = Cost of asset * depreciation rate

Depreciation in Year 1 = 45,000*66.667% = $30,000

Depreciation in Year 2 = (45,000 - 30,000)*66.667% = $10,000

Depreciation in Year 3 = (45,000 - 30,000 - 10,000)*66.667% = $3,333

ACTIVITY BASED METHOD
Depreciation = {(cost - salvage value)*actual activity performed during the period)/total estimated life time activity}

COMPUTER SYSTEM

Lifetime activity = 12,000 + 16,000 +20,000 = 48,000

Depreciation in Year 1 = (95,000 - 12,500)*12,000/48,000 = $20,625

Depreciation in Year 2 = (95,000 - 12,500)*16,000/48,000 = $27,500

Depreciation in Year 3 = (95,000 - 12,500)*20,000/48,000 = $34,375

MANUFACTURING EQUIPMENT

Lifetime activity = 2,400 + 3,200 + 4,800 = 10,400

Depreciation in Year 1 = (500,000 - 25,000)*2,400/10,400 = $109,615

Depreciation in Year 2 = (500,000 - 25,000)*3,200/10,400 = $146,154

Depreciation in Year 3 = (500,000 - 25,000)*4,800/10,400 = $219,231

DELIVERY TRUCK

Lifetime activity = 68,400 + 83,200 + 48,800 = 200,400

Depreciation in Year 1 = (45,000 - 4,500)*68,400/200,400 = $13,823

Depreciation in Year 2 = (45,000 - 4,500)*83,200/200,400 = $16,814

Depreciation in Year 3 = (45,000 - 4,500)*48,800/200,400 = $9,862

2. COMPUTER SYSTEM

DATE	ACCOUNT	DEBIT	CREDIT
	STRAIGHT LINE DEPRECIATION
31-Dec-19	Depreciation expense	16,500
	Accumulated Depreciation		16,500
	DOUBLE DECLINING BALANCE DEPRECIATION
31-Dec-19	Depreciation expense	38,000
	Accumulated Depreciation		38,000
	ACTIVITY BASED DEPRECIATION
31-Dec-19	Depreciation expense	20,625
	Accumulated Depreciation		20,625

MANUFACTURING EQUIPMENT

DATE	ACCOUNT	DEBIT	CREDIT
	STRAIGHT LINE DEPRECIATION
31-Dec-19	Depreciation expense	59,375
	Accumulated Depreciation		59,375
	DOUBLE DECLINING BALANCE DEPRECIATION
31-Dec-19	Depreciation expense	125,000
	Accumulated Depreciation		125,000
	ACTIVITY BASED DEPRECIATION
31-Dec-19	Depreciation expense	109,615
	Accumulated Depreciation		109,615

DELIEVERY TRUCK

DATE	ACCOUNT	DEBIT	CREDIT
	STRAIGHT LINE DEPRECIATION
31-Dec-19	Depreciation expense	13,500
	Accumulated Depreciation		13,500
	DOUBLE DECLINING BALANCE DEPRECIATION
31-Dec-19	Depreciation expense	30,000
	Accumulated Depreciation		30,000
	ACTIVITY BASED DEPRECIATION
31-Dec-19	Depreciation expense	13,823
	Accumulated Depreciation		13,823