Homework Answers
ANSWER A
| YEAR | COST | SALVAGE VALUE | USEFUL LIFE | ANNUAL DEPRECIATION |
| 1 | $33000 | $3100 | 5 | $5980 |
| 2 | $5980 | |||
| 3 | $5980 | |||
| 4 | $5980 | |||
| 5 | $5980 |
STRAIGHT LINE DEPRECIATION FORMULA
ANNUAL DEPRECIATION=COST-SALVAGE VALUE/USEFUL LIFE
ANSWER B
| YEARS | COST | BEGINNING OF PERIOD | 2*SL RATE | ANNUAL DEPRECIATION |
| 1 | $33000 | $33000 | 2*18.12=36.24% | $11959 |
| 2 | $21041 | $21041 | 36.24% | $7625 |
| 3 | $13416 | $13416 | 36.24% | $4862 |
| 4 | $8554 | $8554 | 36.24% | $3100 |
| 5 | $5454 | $5454 | 36.24% | $1677 |
SL RATE=(COST-SALVAGE VALUE/USEFUL LIFE)/COST*100%
ANSWER D
| AMOUNT | EFFECT | |
| STRAIGHT LINE | 10420 | GAIN |
| DOUBLE-DECILING METHOD | 14046 | GAIN |
CALCULATION OF AMOUNT
STRAIGHT LINE=$19500-($33000-$5980*4)=$10420
DOUBLE DECOLING METHOD=$19500-($33000-$11959-$7625-$4862-$3100)=$14046
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