A new medical practice purchases computer equipment that cost $15,000, to be used for medical billing....
A new medical practice purchases computer equipment that cost $15,000, to be used for medical billing. In addition, the practice purchases billing software that cost $5,000. Both the computer equipment and the software are expected to have 3-year useful lives and no salvage value. Calculate the 3 years of depreciation, using SL, DDB, and SYD.
Homework Answers
Answer
| Cost of Computer Equipment | 15000 |
| Cost of Software | 5000 |
| Total Cost | 20000 |
| Salvage Value | 0 |
| Useful Life | 3 |
| SLM Annual Depreciation | 6666.667 |
| SLM Depreciaton Rate (%) | 33.33% |
| Double Declining Depreciation rate | 66.67% |
Depreciation as per DDB:
| Year | Beginning Book Value | Depreciation (%) | Depreciation Amount | Accumulated Depreciation Amount | Ending Book Value |
| 1 | 20,000 | 66.67% | 13,333 | 13,333 | 6,667 |
| 2 | 6,667 | 66.67% | 4,444 | 17,778 | 2,222 |
| 3 | 2,222 | 66.67% | 2,222 | 20,000 | - |
Sum of Years = 1+2+3= 6
| Year | Beginning Book Value | Depreciation Amount | Accumulated Depreciation Amount | Ending Book Value |
| 1 | 20,000 | 10,000.00 | 10,000 | 10,000 |
| 2 | 10,000 | 6,666.67 | 16,667 | 3,333 |
| 3 | 3,333 | 3,333.33 | 20,000 | - |
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