Problem 9-9A Blue Corporation purchased machinery on January 1, 2017, at a cost
ID: 2512891 • Letter: P
Question
Problem 9-9A Blue Corporation purchased machinery on January 1, 2017, at a cost of$320,000. The estimated useful life of the machinery is 4 years, with an estimated salvage value at the end of that period of $28,000. The company is considering different depreciation methods that could be used for financial reporting purposes. ? (a) Prepare separate depreclation schedules for the machlnery using the stralght-lIne method, and the declining-balance method uslng double the stralght-llne rate STRAIGHT-LINE DEPRECIATION Computation End of Year Years Depreciable Cost x Depreciation 2017 2018 2019 2020 = Annual Depreciation Expense Accumulated Depreciation Book Value RateExplanation / Answer
Answer
A
Cost
$320000
B
Salvage value
$28000
C=A-B
Depreciable base
$292000
D
Life
4
E=C/D
Annual SLM depreciation
$73000
F=E/C
SLM rate
25%
G=F x 2
DDB rate
50%
Year
Depreciable cost
Depreciable rate
Annual depreciation expense
Accumulated Depreciation
Book Value
2017
$292000
25%
$73000
$73000
$247000
2018
$292000
25%
$73000
$146000
$174000
2019
$292000
25%
$73000
$219000
$101000
2020
$292000
25%
$73000
$292000
$28000
Year
Book Value [Beginning]
Depreciable rate
Annual Depreciation expense
Accumulated Depreciation
Book Value
2017
$ 3,20,000.00
50%
$ 1,60,000.00
$ 1,60,000.00
$ 1,60,000.00
2018
$ 1,60,000.00
50%
$ 80,000.00
$ 2,40,000.00
$ 80,000.00
2019
$ 80,000.00
50%
$ 40,000.00
$ 2,80,000.00
$ 40,000.00
2020
$ 40,000.00
50%
$ 12,000.00
$ 2,92,000.00
$ 28,000.00
A
Cost
$320000
B
Salvage value
$28000
C=A-B
Depreciable base
$292000
D
Life
4
E=C/D
Annual SLM depreciation
$73000
F=E/C
SLM rate
25%
G=F x 2
DDB rate
50%
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.