Homework Answers
Ans 6A
1
| SLM | |
| Useful Life | 6 |
| Cost | 300000 |
| Residual Value | 40000 |
| Depreciation per year | 43333.33333 |
|
Year |
Depreciation |
| 2014 | 43333 |
| 2015 | 43333 |
| 2016 | 43333 |
| 2017 | 43333 |
| 2018 | 43333 |
| 2019 | 43333 |
Ans 6A
2
| Double declining depreciation schedule | |
| Rate | 16.667 |
Double rate 33.33%
| Year | Depreciation |
| 2014 | 1,00,000 |
| 2015 | 66,667 |
| 2016 | 44,444 |
| 2017 | 29,630 |
| 2018 | 19,259 |
| 2019 | 0 |
Ans 6B
| Book Value after 3 years under double-declining method |
| Year | Depreciation | Book Value |
| 2014 | 1,00,000 | 2,00,000 |
| 2015 | 66,667 | 1,33,333 |
| 2016 | 44,444 | 88,889 |
Hence, book value = 88,889
Ans 6C
| Book Value after 3 years under straight-line method |
300000-43333-43333-43333=170,001
Ans 6D
| Depletion rate | (300000-40000)/400000 | |
| 0.65 | ||
| Unit produced and sold | 120000 | |
| Depreciation exp | 78000 | |
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