Homework Answers
1. Answer: $59320
Acquisition cost of equipment = Purchase price + Freight charges + Cost of foundation and installation = $301000 + $14900 + $40500 = $356400.
Depreciable cost = Acquisition cost – Salvage value = $356400 - $59800 = $296600
Annual depreciation expense = Depreciable cost/Useful life = $296600/5 = $59320
2. Answer: 10%
Straight-line depreciation rate = 100%/Useful life = 100%/20 = 5%
Double-declining-balance method = 2 x 5% = 10%
3. Answer: $42300
Straight-line depreciation rate = 100%/Useful life = 100%/8 = 12.5%
Double-declining-balance method = 2 x 12.5% = 25%
Depreciation for first year = $300800 x 25% = $75200
Book value at beginning of second year = $300800 - $75200 = $225600
Depreciation for second year = $225600 x 25% = $56400
Book value at beginning of third year = $225600 - $56400 = $169200
Depreciation for third year = $169200 x 25% = $42300
4. Answer: $31700
Depreciable cost of factory machine = Cost – Salvage value = $389000 - $72000 = $317000
Depreciation expense for 2018 = $317000 x 3700/37000 = $31700
Per HOMEWORKLIB RULES the first 4 MCQs have been answered. Please post the remaining separately. Thank you.
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