Question

Question 6 of 9 -/1 Presented below is information related to Sheridan Manufacturing Corporation. Estimated Salvage Estimated Life (in years) Asset Cost А $44,700 $5,500 10 B 33,700 4,900 9 36,300 С 3,000 ON D 18.400 1,600 7 E 23,400 2,700 6 Compute the rate of depreciation per year to be applied to the plant assets under the composite method. (Round answer to 2 decimal place, e.g. 4.83%.) Composite rate

Answer 1

Answer:
Asset	Cost (A)	Estimated Salvage (B)	Estimated Life (C )	Depreciation Base D = (A - B )	Straight Line Depreciation ( D / C)
A	$ 44,700	$ 5,500	10	$ 39,200	$ 3,920
B	$ 33,700	$ 4,900	9	$ 28,800	$ 3,200
C	$ 36,300	$ 3,000	9	$ 33,300	$ 3,700
D	$ 18,400	$ 1,600	7	$ 16,800	$ 2,400
E	$ 23,400	$ 2,700	6	$ 20,700	$ 3,450
Total	$ 156,500	$ 17,700		$ 138,800	$ 16,670
Composite rate = Total Depreciation / Total Cost =   $ 16,670 / $ 156,500	10.65%

Account Titles and Explanation	Debit	Credit
Depreciation	$ 16,670
Accumulated Depreciation		$ 16,670
(To record the Depreciation for the Year)
Account Titles and Explanation	Debit	Credit
Cash	$ 4,800
Accumulated Depreciation   - Bal. Fig.	$ 13,600
Asset D - Plant Assets		$ 18,400
(To record the Sale of Asset D)