Ans. 1 | Option 1st $18,059.15 | ||||
Depreciation per unit = (Cost of asset - Residual value) / Expected activity | |||||
($71,916 - $4,607) / 15,449 | |||||
$67,309 / 15,449 | |||||
$4.356852 | per unit | ||||
Depreciation (2nd year) = Depreciation per unit * Actual activity of 2nd year | |||||
$4.356852 * 4,145 | |||||
$18,059.15 | |||||
Ans. 2 | Option 1st $26,443.17 | ||||
Straight line depreciation = (Cost of asset - Residual value) / Useful life in years | |||||
($168,104 - $9,445) / 6 | |||||
$158,659 / 6 | |||||
$26,443.17 | |||||
*In Straight line method the depreciation is equal in each year. | |||||
So the depreciation for first year is $26,443.17 | |||||
Ans. 3 | Option 4th $15,168 | ||||
Double declining balance method: | |||||
Double declining balance depreciation rate = 2 * 1 / life of assets | |||||
2 * 1 / 5 | |||||
0.40 | |||||
*Depreciation = Remaining value at the beginning of the year * Double declining balance depreciation rate | |||||
Year | Value at the beginning (a) | Depreciation (b = a*0.40) | Net book value (a - b) | ||
1 | $63,200 | $25,280 | $37,920 | ||
2 | $37,920 | $15,168 | $22,752 | ||
A machine with a cost of $71,916.00 has an estimated residual value of $4,607.00 and an...
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