Question

B! Einancial Accounting 1 / Topic 12 / Final exam In 2018, Close Co purchased a bus for 532732. The company expects the bus to last for 12 years and should travel about 365550 kilometres (kms). It is expected that the bus will be sold at an auction for $30,000 in the end. During 2018 the bus was used for 30 000 kms Calculate the depreciation expense for the machine 2018 using the straight line method Answer In 2018, Close Co purchased a bus for 532732 The company expects the bus to last for 12 years and should travel about 366550 kilometros (km). It is expected that the bus will be sold at an auction for $30,000 in the ond During 2018 the bus was used for 30.000 km Calculate the depreciation expense for the machine 2018 using the unit of production method Answer 29 in 2018. Close Co purchased a bus for 532732. The company expects the bus to last for 12 years and should travel about 365560 kilometres (ms) it is expected that the bus will be sold at an auction for $30,000 in the end During 2018 the bus was used for 30,000kms Calculate the depreciation expense for the machine 2018 using double declining balance method Answer Previous

Answer 1

Part A: Depreciation Expense Using Straight line method:-

Depreciation for year 2018= Puchases cost - expected selling price at end ( salvage) / Useful life

=$ 532732 - 30000 / 12 years

= $ 41894.33 Round off to $41894

Part B: Depreciation Expense using unit of production method:-

Depreciation for year 2018 =( Puchases cost - Salvage) / Total Estimated kilometers in Life X Used kilometers in 2018

= ( $ 532732 - $30000) / 365550 kms X 30000 kms

= $41258.27 round off to $ 41258

Part C: Depreciation using Double declining Method:

Double declining depreciation rate = 1/ Useful life X 100 X 2 = 1/ 12 X 200= 16.67%

Depreciation for year 2018 = purchased cost X 16.67%

= $ 532732 X 16.67%

= $ 88806.42 Rounded off to 88806

Hope this helps you, Thank you!?