Question

Bramble Corporation purchased machinery on January 1.2022. at a cost of $256.000. The estimated useful life of the machinery is 4 years, with an estimated salvage value at the end of that period of $30,600. The company is considering different depreciation methods that could be used for financial reporting purposes. Prepare separate depreciation schedules for the machinery using the straight-line method, and the declining-balance method using double the Straight-line rate. STRAIGHT-LINE DEPRECIATION End of Year Computation Depreciable Cost X Depreciation Rate = Annual Depreciation Expense Accumulated Depreciation Years 2022 $ 2023 2024 2025 DOUBLE-DECLINING-BALANCE DEPRECIATION End of Year Computation Book Value Beginning of * Depreciation Rate = Annual Depreciation Expense Accumulated Depreciation Book Val Year 1,400

Answer 1

Answers

• Working

A	Cost	$          256,000.00
B	Residual Value	$            30,600.00
C=A - B	Depreciable base	$          225,400.00
D	Life [in years]	4
E=C/D	Annual SLM depreciation	$            56,350.00
F=E/C	SLM Rate	25.00%
G=F x 2	DDB Rate	50.00%

• [a]

Year	Depreciable cost	Depreciation rate	Annual Depreciation expense	Accumulated Depreciation	Book Value
2022	$225,400	25%	$56,350	$56,350	$253,650
2023	$225,400	25%	$56,350	$112,700	$197,300
2024	$225,400	25%	$56,350	$169,050	$140,950
2025	$225,400	25%	$56,350	$225,400	$84,600
			$225,400

• [b]

Year	Book Value Beginning	Depreciation rate	Annual Depreciation expense	Accumulated Depreciation	Book Value
2022	$256,000	50%	$128,000	$128,000	$182,000
2023	$182,000	50%	$91,000	$219,000	$91,000
2024	$91,000	50%	$45,500	$264,500	$45,500
2025	$45,500		$14,900	$279,400	$30,600
			$279,400