Exercise 11-1 Windsor Company purchases equipment on January 1, Year 1, at a cos

Question

Exercise 11-1 Windsor Company purchases equipment on January 1, Year 1, at a cost of $483,070. The asset is expected to have a service life of 12 years and a salvage value of $41,200. Compute the amount of depreciation for Years 1 through 3 using the straight-line depreciation method. (Round answers to 0 decimal places, e.g. 5,125.) Depreciation for Year 1 36,822.50 $36,822.50 Depreciation for Year 3 36,822.50 Depreciation for Year 2 s Compute the amount of depreciation for each of Depreciation for Year 1 Depreciation for Year 2 Years 1 through 3 using the sum-of-the-years'-digits method.

Explanation / Answer

a) Straight line Method :-

Depreciation = ($483070 - $41200)/12

= $36822.5

b) Sun of the Years Digits Method:-

**(12*13)/2 = 78

c) Double Declining Balance Method :-

Depreciation Rate = (100%/12)*2 = 16.67%

Year Depreciation($) 1 36822.5 2 36822.5 3 36822.5  

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