Determine the amount of depreciation expense for the years ended December 2014 2

Question

Determine the amount of depreciation expense for the years ended December 2014 2015, 2016, and 2017, by (a) the straight-line method, (b) the units-of-output method and (c) the double-declining-balance method. 1 . Determine the annual depreciation expense for each of the estimated four years use, the accumulated depreciation at the end of each year, and the book value of equipment at the end of each year by (a) the straight-line method and (b) the double declining -balance method. The following columnar headings are suggested for e? schedule:

Explanation / Answer

SLM Cost of Machine            110,000.00 Salvage Value                 7,500.00 Life in years                         4.00 Particulars 1 2 3 4 Opening Balance            110,000.00           84,375.00         58,750.00         33,125.00 Depreciation(110,000-7,500)/4              25,625.00           25,625.00         25,625.00         25,625.00 Closing balance              84,375.00           58,750.00         33,125.00           7,500.00 Life   4 Years Double decling balance method rate = 25%*2 50% Particulars 2014 2015 2016 2017 Opening Balance            110,000.00           55,000.00         27,500.00         13,750.00 Depreciation@50%              55,000.00           27,500.00         13,750.00           6,250.00 Closing balance              55,000.00           27,500.00         13,750.00           7,500.00 SLM Year Dep Exp Acc Dep BV at end                                                1.00              25,625.00           25,625.00         84,375.00                                                2.00              25,625.00           51,250.00         58,750.00                                                3.00              25,625.00           76,875.00         33,125.00                                                4.00              25,625.00         102,500.00           7,500.00 Double declining Year Dep Exp Acc Dep BV at end                                                1.00              55,000.00           55,000.00         55,000.00                                                2.00              27,500.00           82,500.00         27,500.00                                                3.00              13,750.00           96,250.00         13,750.00                                                4.00                 6,250.00         102,500.00           7,500.00 2) Particulars Dr Amt Cr Amt Cash A/C Dr              18,000.00 To Equipment A/C           13,750.00 To Gain              4,250.00 3) Particulars Dr Amt Cr Amt Cash A/C Dr              10,500.00 Loss A/C Dr                 3,250.00 To Equipment A/C           13,750.00

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