Question

Which of the following statements is true?

Select one:

a. Estimated residual value is not used when calculating double-declining depreciation.

b. The annual amount of depreciation is the same for straight line, double declining, and units of production methods of depreciation.

c. When calculating straight line depreciation, salvage value is ignored.

d. Cost is equal to residual value when using the units of production method for depreciation.

Answer 1

Answer > <«) Estimated Residual Velye_is not used when caleybating double dedining balanse_depreciating (a) Double Dediolag Balance Method of depreciation Double Dellbing Balance method of calculating depreciation is accelerq bet rate of depreciation method. This means at the initial age of asset.. the depreciation is so high and decenies tremendously throughouli the increase in life of asset. It is at double role of depreciation from the shoqight Sige lepreciating agter The Depreciati24_under double declining balance is calulated جو کد ها _ Depreciation Center Double Occiolog Biplaace) X 5 Grrying Amount of Asset 2 X 1 he Useful lite of Asset This shows that there is no need of salvage Veltle while coleellgling depreciation under the double declining balance method of depreciation - The salvage Value of Asset is adjusted qt the end of yeau of useful life of asset under double declining balance method of depreciation Reasons for other statements false i (b) The 9904°40049£ of depreciation under straight line methol of depreciation is same for each yeau and not same as the double declining and units of productions method of depresiyhon because the carrying 400496 of groet and units of prosuction changes every year in double declining balance 998 units of polyclün method of deprecation respectively

ca chile_Cahulsting depreciating_yader shqight line method, salvage value must be requiul. Depreciation under straight tive method is Gluqhd er: _ Depreciatian (498er - Cost of Asset - Salvage Valye Shaight (inc) Wurtul lice of Asset (d) under yosts of production method of depreciation, cost is not qual to the residual valye of quiet cost of Asset wt is reduced by Caluge velile for calculating depreciation Depreciation_lyner 40/65 : (Cost of Alips - Splugge) x Current year Of Polyclion Method) - Volyel Production Estimated unlo of fladyction .. caluplating The correct statement from the above is a) Estimated Resideal value is not ured when - Jouble declining bolence depreciation