I NEED HELP WITH THE FOLLOWING ACCOUNTING DEPRECIATION PROBLEM PLEASE: Depreciat

Question

I NEED HELP WITH THE FOLLOWING ACCOUNTING DEPRECIATION PROBLEM PLEASE:

Depreciation by Three Methods; Partial Years

Razar Sharp Company purchased equipment on July 1, 2012, for $50,490. The equipment was expected to have a useful life of three years, or 7,560 operating hours, and a residual value of $1,350. The equipment was used for 1,400 hours during 2012, 2,600 hours in 2013, 2,300 hours in 2014, and 1,260 hours in 2015.

Required:

Determine the amount of depreciation expense for the years ended December 31, 2012, 2013, 2014, and 2015, by (a) the straight-line method, (b) units-of-output method, and (c) thedouble-declining-balance method.

Note: FOR DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then round the answer for each year to the nearest whole dollar.

a. Straight-line method

b. Units-of-output method

c. Double-declining-balance method

Explanation / Answer

1 Straight Line Method : Year Cost Salvage Value Life Time (Months) Depreciation ((Cost - Salvage Value)/ Life)* (Months /12) Amount 2012 50490 1350 3 6 ((50490-1350)/3)(6/12) 8190 2013 50490 1350 3 12 ((50490-1350)/3) 16380 2014 50490 1350 3 12 ((50490-1350)/3) 16380 2015 50490 1350 3 6 ((50490-1350)/3)(6/12) 8190 2 Units of Output Method Year Cost Salvage Value Hours Used Life (Hours) Depreciation (Hours Used /Life Hours)*(Cost - Salvage Value) Amount 2012 50490 1350 1400 7560 (1400 /7560) *(50490 -1350) 9100 2013 50490 1350 2600 7560 (2600 /7560) *(50490 -1400) 16900 2014 50490 1350 2300 7560 (2300 /7560) *(50490 -1350) 14950 2015 50490 1350 1260 7560 (1260 /7560) *(50490 -1350) 8190 3 Double declining Method Year Dep Rate Beginning Book Value Time (Months) Ending Book Value Depreciation 2/ Life Dep. rate × beg. book Value * Months / Year Amount A B C D E = C-F F 2012 0.6667 50490 6 $33,659.16 (0.6667 *50490*6/12) $16,830.84 2013 0.6667 $33,659.16 12 $11,218.60 (0.6667 *50490*12/12) $22,440.56 2014 0.6667 $11,218.60 12 $3,739.16 (0.6667 *50490*12/12) $7,479.44 2015 0.6667 $3,739.16 6 $2,492.71 (0.6667 *50490*6/12) $1,246.45

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