Homework Answers
| SOLUTION :A | |||||||||
| CALCULATION OF THE DEPRECIATION AS PER STRAIGHT LINE METHOD | |||||||||
| Purchase Cost of Equipment | $ 96,000 | ||||||||
| Less: Salvage Value | $ 5,000 | ||||||||
| Net Value for Depreciation (A) | $ 91,000 | ||||||||
| Usefule life of the Assets (B) | 8 | Years | |||||||
| Depreciation per year = Value for Depreciation (A/B) | $ 11,375 | ||||||||
| DEPRECIATION SCHEDULE - STRAIGHT LINE METHOD | |||||||||
| DEPRECIATION EXPENSS OF THE YEAR | |||||||||
| Year | Assets Cost | Depreciable Cost | Depreciaiton Expenses | Accumulated Depreciation | Book Value | ||||
| January.01 2017 | 96,000 | $ 96,000 | |||||||
| Dec.31 2017 | $ 91,000 | $ 11,375 | $ 11,375 | $ 84,625 | |||||
| Dec.31 2018 | $ 91,000 | $ 11,375 | $ 22,750 | $ 73,250 | |||||
| Answer = Depreciation Expenses as per SLM for the year ended Dec.31 2017 = $ 11,375 | |||||||||
| SOLUTION : B | |||||||||
| CALCULATION OF THE DEPRECIATION AS PER UOP METHOD | |||||||||
| Purchase Cost of Equipment = | $ 96,000 | ||||||||
| Less: Salvage Value = | $ 5,000 | ||||||||
| Net Value for Depreciation (A) | $ 91,000 | ||||||||
| Expected to Produce in Units (B) | 1,00,000 | Units | |||||||
| Depreciation per Units = (A/B) | $ 0.91 | Per Units | |||||||
| DEPRECIATION SCHEDULE - UNIT OF PRODUCTION METHOD | |||||||||
| DEPRECIATION EXPENSS OF THE YEAR | |||||||||
| Year | Assets Cost | Units Produced | X | Rate Per Unit | = | Depreciaiton Expenses | Accumulated Depreciation | Book Value | |
| January.01 2017 | 96,000 | $ 96,000 | |||||||
| Dec.31 2017 | 16,000 | X | $ 0.91 | = | $ 14,560 | $ 14,560 | $ 81,440 | ||
| Dec.31 2018 | 36,000 | X | $ 0.91 | = | $ 32,760 | $ 47,320 | $ 48,680 | ||
| Answer = Carrying amount of the Equipment as on Dec. 31 2018 = $ 48,680 | |||||||||
| SOLUTION : C | |||||||||
| CALCULATION OF THE DEPRECIATION AS PER DOUBLE DECLINE METHOD | |||||||||
| Purchase Cost of Equipment = | $ 96,000 | ||||||||
| Rate of Depreciation = | |||||||||
| Rate of Depreciation = (1 / 8 Years ) | 0.125 or 12.50% | 0.125 | |||||||
| (Depreication / Purchase price ) | |||||||||
| Double decline deprection rate = 12.5% * 2 = | 25.0% | ||||||||
|
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