Question

Problem 9-10A Calculating depreciations partial year's depreciation 10 CHECK FIGURES: Deprec. Expense 2021: Office equip. $3,800; Machinery At December 31, 2020, Halifax Servicing's balance sheet showed capital Halifax Servicing's balance sheet showed capital asset information as detailed in the schedule below. Halifax calculates depreciation to the nearest whole month. $3,800; Machinery = $19,638; Truck = $23,664 Cost Information Depreciation Balance of Depreciation Balance of Accum. Deprec. Expenses for Accum. Deprec. Dec 31, 2020 2021 Dec 31, 2021 Date of Depreciation Description Purchase Method Cost' Residual Life Office Equip. March 27/17 Straight-line $ 52,000 $14,000 10 yr. Machinery June 4/17 Double 275,000 46.000 6 y. declining balance Truck Nov. 13/20 Units of 113,000 26,000 250,000 production km There have been no disposals or betterments since the date of purchase Actual kilometres driven were 2020, 14.000; 2021. 68.000 Required Complete the schedule (round only your final answers). 674

Answer 1

Cost information

Depreciation

Description	date of purchase	Depreciation method	cost	residual	life	balance of Accum. Depreciation Dec 31 2020	Depreciation for Dec 2021	Balance of accum.deprec. Dec 31 2021
Office equipment	March 27/17	straight line	52,000	14,000	10 yr	14,250	3,800	18,050
Machinery	June 4/17	DDB	275,000	46,000	6 yr	209,362	19,638	229,000
Truck	Nov 13/20	Units of production	113,000	26,000	2,50,000 km	4,872	23,664	28,536

Office equipment=( cost - residual value)/working life

=( 52,000 - 14,000)/10 yr

= 3,800 per year

Depreciation for 2017 = 3,800×9 months/12 months

= 2,850

Deprecation schedule of equipment

Year	Depreciation Expenses	Accumulated depreciation
2017	2,850	2,850
2018	3,800	6,650
2019	3,800	10,450
2020	3,800	14,250
2021	3,800	18,050

Machinery= 275,000/6 year=45,833.333

Rate = 45,833.33/275,000=16.666666

Double declining rate= 16.6666666× 2

33.33%

Because assets is purchased on 4 june Depreciation will calculated for 7 months in 2017

Depreciation schedule for machinery

Year	book value start	Depreciation percentage	Depreciation Expenses	Accumulated depreciation	book value year end
2017	275,000	19.44%	53,472	53,472	221,528
2018	221,528	33,33%	73,843	127,315	147,685
2019	147,685	33.33%	49,228	176,543	98,457
2020	98,457	33.33%	32,819	209,362	65,638
2021	65,638	29.92%	19,638	229,000	46,000

Truck = (cost - residual value)× kilometres driven in year/ total working life

Dep for 2020= (113,000 - 26,000)×14,000km/250,000km

= 4,872

Dep for 2021= (113,000-26,000)×68,000km/250,000km

=23,664