Help please! I need assistance findind depreciation expense and accumulated depr
ID: 2421072 • Letter: H
Question
Help please! I need assistance findind depreciation expense and accumulated depreciation? My first depreciation expense is correct. I need assistance with the rest. I believe the number of years being 2.25 is throwing me off. Please help and explain!
Porter, Inc., acquired a machine that cost $361,000 on October 1, 2013. The machine is expected to have a five-year useful life and an estimated salvage value of $50,000 at the end of its life. Porter, Inc., uses the calendar year for financial reporting. Depreciation expense for one-fourth of a year was recorded in 2013 Required: income statement for the year ended December 31, 2015, and the balance of the Accumulated Depreciation account as of December 31, 2015. (Note: This is the third calendar year in which the asset has been used.) Depreciation expense Accumulated depreciation 62,200 202,150 202.150 b. Using the double-declining-balance depreciation method, calculate the depreciation expense for the year ended December 31, 2015, and the net book value of the machine at that date. Depreciation expense Net book value 129,960 $216,600Explanation / Answer
Double-declining balance (ceases when the book value = the estimated salvage value)
2 × Straight-line depreciation rate × Book value at the beginning of the year
Depreciation % under straight line=1/5 years =20%
Double decline method= 20% x 2=40%
Straight Line Method
Year
Op Balance
Dep Exp
Accu Dep
End Balace
2013
361,000
15,550
15,550
345,450
2014
345,450
62,200
77,750
283,250
2015
283,250
62,200
139,950
221,050
2016
221,050
62,200
202,150
158,850
2017
158,850
62,200
264,350
96,650
2015- Depreciation expense-$62,200 and Acc dep -$139,950
Double Decline Method
Year
Op Balance
Dep Exp
Accu Dep
End Balace
2013
361,000
36,100
36,100
324,900
2014
324,900
129,960
166,060
194,940
2015
194,940
77,976
244,036
116,964
2016
116,964
46,786
290,822
70,178
2017
70,178
20,178.36
311,000
50,000
2015- Depreciation expense-$77,976 and Acc dep -$244,036
Straight Line Method
Year
Op Balance
Dep Exp
Accu Dep
End Balace
2013
361,000
15,550
15,550
345,450
2014
345,450
62,200
77,750
283,250
2015
283,250
62,200
139,950
221,050
2016
221,050
62,200
202,150
158,850
2017
158,850
62,200
264,350
96,650
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