Question

At the end of an asset's useful life, the balance in Accumulated Depreciation will: A. be a greater amount under straight - line depreciation than under double declining -balance depreciation B. be greater under units - of - production depreciation than under straight - line depreciation C. be the same amount under all the depreciation methods D. be a lesser amount under double -declining -balance depreciation than under units of - production depreciation

Answer 1

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and format. For detailed answer refer to the supporting sheet.

Answer Part 1) The correct answer is C) Be the same under all the depreciation methods Explanation At the end of useful life, all the value of the asset is charges as depreciation except its residual value under all depreciation methods, so the balance of accumulated depreciation will be same. Part 2) The correct asnwer is A) the book value used in the computation each year decreases. 1 Explanation, since the depreciation is charges on WDV, as WDV decreases, the depreciation also decreases 3 Part 3) The correct answer is D) $ 1250 Gain 5 Calculation Gain / Loss = sales - book value B = 25000 - 35000 - (3* (35000-5000)/8)) = 25000 - (35000-11250) = $ 1250 Gain 2 Part 4) The correct answer is D) Debiting Equipment 5 Explanation 5 When an expenditure is incurred that increase the life of the asset than it should be capitalised and asset account should be 3 Part 5) The correct answer is A) $ 20000 1 Calculation 2 Depreciation under SLM = (cost-salvage value)/life B = (120000-20000)/5 = $ 20000