Question

Windsor Company purchases equipment on January 1, Year 1, at a cost of $516,000. The asset is expected to have a service life of 12 years and a salvage value of $46,440. Compute the amount of depreciation for each of Years 1 through 3 using the straight-line depreciation method. (Round answers to 0 decimal places, e.. 5,125.) Depreciation for Year 1 Depreciation for Year 2 Depreciation for Year 3 LINK TO TEXT Compute the amount of depreciation for each of Years 1 through 3 using the sum-of-the-years-digits method. Depreciation for Year 1 s Depreciation for Year 2 Depreciation for Year 3 s LINK TO TEXT . 15.34. Round Compute the amount of depreciation for each of Years I through 3 using the double-declining balance method. (Round depreciation rate to 2 decimal places O decimal places, eg. 45.892.)

Answer 1

1)	Straight line depreciation
	= (cost - salvage value )/ life of asset
	=($516000-46440)/12
	=$39130
	Dpreciation for year 1			$       39,130
	Dpreciation for year 2			$       39,130
	Dpreciation for year 3			$       39,130
2)	Sum of digit method
Depreciable amount = $516000-46440 =$469560
Year	sum of digit	Deprecition
a	b	c=469560/78*b
1	12	72240
2	11	66220
3	10	60200
4	9	54180
5	8	48160
6	7	42140
7	6	36120
8	5	30100
9	4	24080
10	3	18060
11	2	12040
12	1	6020
78		0
Dpreciation for year 1			$                                72,240
Dpreciation for year 2			$                                66,220
Dpreciation for year 3			$                                60,200
3)	Double decling balance method
Useful Life		12	Years
Cost		$             5,16,000
Residual Value		$                 46,440
Depreciable Value		$             4,69,560
Depreciation Rate		16.67%
Year	Depreciation Expenses	Acc Depreciation	Book Value End Of Year
1	$          86,000	$                 86,000	$                            4,30,000
2	$          71,667	$             1,57,667	$                            3,58,333
3	$          59,722	$             2,17,389	$                            2,98,611