Question

Problem 3 South Plains Corp. purchased a machine on March 26, 2012 for $500,000. The machine was estimated to have a useful life of 12 years and a salvage value of $50,000. South Plains originally used the straight-line depreciation method, taking one-half-year of depreciation in the year of purchase. In 2015 South Plains switched to the sum-of-the-years-digits depreciation method for 2015 and all future years. What is depreciation expense for 2015?

Answer 1

mothed Depreciation as les straight line Wuuuuuuu Penchane Cost - salvage value life of Assets. $ 500,000 - $50,000 + lo years $ 37, 500 = Depreciation in 2012 = $37,500 x sol. = $18,750 Depreciation in 2013 - $375.00 Depreciation in 2014 a $37, 500 In 2015 South Plains switched to the sum of the year digits Debreciation method. Depreciation - Remaining Usefale life of Asses -X Debreciable cost Sum of years Digit Here Depreciable cost - $ 5,00,000 - $ (18,750 +37,50 + $ 37,900 - Soooo = $ 3,56,850 Remaing life. = 12-3 = a year. Sum of year Digit = Cat & +7+ 6 + s t ut 3+2+1) = 45 Depreciation - $3,56,250 X 9 45 - $ 7950 REDMI NOTE 5 PRO MI DUAL CAMERA 2020/2/13 17:53