15. A plant asset acquired on October 1, 2017, at a cost of $400,000 has an esti
ID: 2466713 • Letter: 1
Question
15.
A plant asset acquired on October 1, 2017, at a cost of $400,000 has an estimated useful life of 10 years. The salvage value is estimated to be $40,000 at the end of the asset's useful life.
Instructions
Determine the depreciation expense for the first two years using:
(a)
the straight-line method.
(b)
the double-declining-balance method.
15.
A plant asset acquired on October 1, 2017, at a cost of $400,000 has an estimated useful life of 10 years. The salvage value is estimated to be $40,000 at the end of the asset's useful life.
Instructions
Determine the depreciation expense for the first two years using:
(a)
the straight-line method.
(b)
the double-declining-balance method.
Explanation / Answer
Depreciation Schedule
Cost: $400,000.00, Salvage: $40,000.00, Life: 10 years, First Year: 3 months
Depreciation Schedule under straight line method YearBook Value
Year Start Depreciation
Expense Accumulated
Depreciation Book Value
Year End 2017 $400,000 $9,000.00 $9,000 $391,000 2018 $391,000 $36,000.00 $45,000 $355,000 2019 $355,000 $36,000.00 $81,000 $319,000
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