Monty Company acquired a plant asset at the beginning of Year 1. The asset has an...
Monty Company acquired a plant asset at the beginning of Year 1.
The asset has an estimated service life of 5 years. An employee has
prepared depreciation schedules for this asset using three
different methods to compare the results of using one method with
the results of using other methods. You are to assume that the
following schedules have been correctly prepared for this asset
using (1) the straight-line method, (2) the
sum-of-the-years'-digits method, and (3) the
double-declining-balance method.
|
Year |
Straight-Line |
Sum-of-the- |
Double-Declining- |
|||||||||
| 1 | $10,620 | $17,700 | $23,600 | |||||||||
| 2 | 10,620 | 14,160 | 14,160 | |||||||||
| 3 | 10,620 | 10,620 | 8,496 | |||||||||
| 4 | 10,620 | 7,080 | 5,098 | |||||||||
| 5 | 10,620 | 3,540 | 1,746 | |||||||||
| Total | $53,100 | $53,100 | $53,100 | |||||||||
Answer the following questions.
What is the cost of the asset being depreciated?
|
Cost of asset |
What amount, if any, was used in the depreciation calculations
for the salvage value for this asset?
| Salvage value |
Homework Answers
| Double-Declining-rate | 40% | =1/5*2 |
| a | ||
| Cost of asset | 59000 | =23600/40% |
| b | ||
| Salvage value | 5900 | =59000-53100 |
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(a)
Your answer is incorrect. Try again.
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