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Problem 9-8A
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STRAIGHT-LINE DEPRECIATION
Computation
End of Year
Years
Depreciable Cost
Depreciation Rate
Annual Depreciation Expense
Accumulated Depreciation
Book Value
DOUBLE-DECLINING-BALANCE DEPRECIATION
Computation
End of Year
Years
Book Value Beginning of Year
Depreciation Rate
Annual Depreciation Expense
Accumulated Depreciation
Book Value
2,050
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Problem 9-8A
Boscan Corporation purchased machinery on January 1, 2014, at a cost of $250,000. The estimated useful life of the machinery is 4 years, with an estimated salvage value at the end of that period of $29,200. The company is considering different depreciation methods that could be used for financial reporting purposes.Warning
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Explanation / Answer
Depreciation = (250000-29200)/4 55200 Depreciation Rate 55200/220800 0.25 Straight Line Depreciation Years Depreciable X Depreciation = Annual Accumulated Book Value Cost Rate Dep Dep Expense 2014 220800 25% 55200 55200 194800 2015 220800 25% 55200 110400 139600 2016 220800 25% 55200 165600 84400 2017 220800 25% 55200 220800 29200 Double Declining 25%*2 = 50% Years Depreciable X Depreciation = Annual Accumulated Book Value Cost Rate Dep Dep Expense 2014 220800 50% 110400 110400 139600 2015 110400 50% 55200 165600 84400 2016 55200 50% 27600 193200 56800 2017 27600 50% 27200 220400 29600
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