Homework Answers
1. Straight line depreciation = (cost - salvage value) / life
= ($16000-$1400)/4 = $3650
2. Units produced method
Depreciation = ($16000-$1400)*17000/58400 = $4250
3. Double declining method
Rate of depreciation = 100/life * 200%
= 100/4*200% = 25%
Book value in 2015 starting after two year depreciation
= ($16000-50%) - 50%
= $4000
Depreciation in 2015
= $4000*50% = $2000
Entry in all three methods will be same , only the amount will be different according to above calculation
Journal entry will be
Depreciation account (debit)
Machine account (credit)
Feel free to ask any queries..
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