1.
Straight line Depreciation = (Original Value - Residual Value) /
Useful Life
= ($571600-47200) / 4 = $131100
Years | Beg Value | Depreciation | Accumulated Depreciatio | End Value |
1 | $ 571,600 | $ 131,100 | $ 131,100 | $ 440,500 |
2 | $ 440,500 | $ 131,100 | $ 262,200 | $ 309,400 |
3 | $ 309,400 | $ 131,100 | $ 393,300 | $ 178,300 |
4 | $ 178,300 | $ 131,100 | $ 524,400 | $ 47,200 |
Units of Activity Method = (Original Value - Residual Value) /
Total Operating Hours
= ($571600-47200) / 7600 = $69 per hour
Years | Hours | Depreciation | Accumulated Depreciatio | End Value |
1 | 2900 | $ 200,100 | $ 200,100 | $ 371,500 |
2 | 2400 | $ 165,600 | $ 365,700 | $ 205,900 |
3 | 1400 | $ 96,600 | $ 462,300 | $ 109,300 |
4 | 900 | $ 62,100 | $ 524,400 | $ 47,200 |
Double Declining Balance method = Beginning Book Value x 2 times straight line rate
Years | Beg Value | Depreciation @50% | Accumulated Depreciatio | End Value |
1 | $ 571,600 | $ 285,800 | $ 285,800 | $ 285,800 |
2 | $ 285,800 | $ 142,900 | $ 428,700 | $ 142,900 |
3 | $ 142,900 | $ 71,450 | $ 500,150 | $ 71,450 |
4 | $ 71,450 | $ 24,250 | $ 524,400 | $ 47,200 |
Maximum Depreciation is such that end book value doesnot get below
residual value.
Therefore Depreciation of Year 4 is restricted to $24250
2.
Double Declining Balance method
3.
All methods provide same total depreciation
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