Swanson & Hiller, Inc., purchased a new machine on September 1, 2008, at a cost
ID: 2371219 • Letter: S
Question
Swanson & Hiller, Inc., purchased a new machine on September 1, 2008, at a cost of $118,000. The machine's estimated useful life at the time of the purchase was five years, and its residual value was $6,000.
Swanson & Hiller, Inc., purchased a new machine on September 1, 2008, at a cost of $118,000. The machine's estimated useful life at the time of the purchase was five years, and its residual value was $6,000.
a-2. Prepare a complete depreciation schedule, beginning with calendar year 2008, using the 200 percent declining-balance schedule method (assume that the half-year convention is used). (Round your answers to the nearest dollar amount. Omit the "$" sign in your response.)
Explanation / Answer
a. (1) Straight-Line Schedule: Depreciation Expense Accumulated Depreciation Book Year Computation Value 2006 $100,000 x 1,5 x 4/2 $6,667 $6,667 $101,333 2007 100,000 x 1,5 20,000 26,667 81,333 2008 100,000 x 1,5 20,000 46,667 61,333 2009 100,000 x 1,5 20,000 66,667 41,333 2010 100,000 x 1,5 20,000 86,667 21,333 2011 100,000 x 1,5 x 81/2 13,333 100,000 8,000 =========================================================================== (2) 200% Declining-Balance Schedule: Depreciation Expense Accumulated Book Year Computation Depreciation Value 2006 $108,000 x 40% x 4??2 $14,400 $14,400 $93,600 2007 93,600 x 40% 37,440 51,840 56,160 2008 56,160 x 40% 22,464 74,304 33,696 2009 33,696 x 40% 13,478 87,782 20,218 2010 20,218 x 40% 8,087 95,869 12,131 2011 100,000
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