Question

On March 10, 2019, Sheridan Company sells equipment that it purchased for $216,960 on August 20, 2012. It was originally estimated that the equipment would have a life of 12 years and a salvage value of $18,984 at the end of that time, and depreciation has been computed on that basis. The company uses the straight-line method of depreciation.

Compute the depreciation charge on this equipment for 2012, for 2019, and the total charge for the period from 2013 to 2018, inclusive, under each of the six following assumptions with respect to partial periods. (Round depreciation per day to 2 decimal places, e.g. 15.64 and final answers to 0 decimal places, e.g. 45,892.)

				2012		2013-2018 Inclusive		2019
(1)		Depreciation is computed for the exact period of time during which the asset is owned. (Use 365 days for the base and record depreciation through March 9, 2019.)		$		$		$
(2)		Depreciation is computed for the full year on the January 1 balance in the asset account.		$		$		$
(3)		Depreciation is computed for the full year on the December 31 balance in the asset account.		$		$		$
(4)		Depreciation for one-half year is charged on plant assets acquired or disposed of during the year.		$		$		$
(5)		Depreciation is computed on additions from the beginning of the month following acquisition and on disposals to the beginning of the month following disposal.		$		$		$
(6)		Depreciation is computed for a full period on all assets in use for over one-half year, and no depreciation is charged on assets in use for less than one-half year. (Use 365 days for base.)		$		$		$

Answer 1

ANSWER

	Note	2012	2013-2018	2019
1) Depreciation as per exact time period of time during which asset is owned	1	6,011.60	98,988.00	3,073.60
2) Depreciation is computed for full year on balance of 1 jan	2	-	98,988.00	16,498.00
3)Depreciation is computed for full year on balance of 31 Dec	3	16,498.00	98,988.00	-
4) Depreciation for the one half year is charged for acquired or disposed of during year	4	8,249.00	98,988.00	8,249.00
5)depreciation is computed on additions from the beginning of the month following acquisition and on disposals to the month following disposal	5	5,499.33	98,988.00	12,373.5
6) Depreciation is computed for a full period on the all assets in use for over one half year and no depreciation is charged on assets in use for less than one half year.	6	-	98,988.00	-

  

Note 1	Depreciation for the year under straight line method = (Cost of Equipment- salvage value)/life of assets
		=(216,960 -18,984 )/12
		16,498
		Days	Calculation	Depreciation
	Days in 2012	133	=16,498/365*133	6,011.60
	Days in 2019	68	=16,498/365*68	3,073.60
	2013-2018	6	=16,498*6	98,988.00
Note 2
	2012	0	As equipment was purchased on 20 th August.2012 and same was not included in the Balance as of 1 St january 2012
	2013-2018	98,988	Depreciation for six years
	2019	16,498	Depreciation for full year
Note 3	2012	16,498	Depreciation for full year
	2013-2018	98,988	Depreciation for six years
	2019	0	As equipment was sold during year and same was not included in the Balance as of 31 dec 2019
Note 4	2012	8,249	one half year depreciation for the year when asset acquired
	2013-2018	98,988	Depreciation for six years
	2019	8,249	one half year depreciation for the year when asset Sold
Note 5	2012	5,499.33	Month following to addition is September, Depreciation for 4 months
	2013-2018	98,988	Depreciation for six years
	2019	12,373.5	Month following to disposal is April, Depreciation for 9 months
Note 6	2012	0	Asset used for 133 days means less than 0ne half year hence no depreciation
	2013-2018	98,988
	2019	0	Asset used for 68 days means less than 0ne half year hence no depreciation

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