Bridgeport Company purchased a new plant asset on April 1, 2017, at a cost of $8

Question

Bridgeport Company purchased a new plant asset on April 1, 2017, at a cost of $846,090. It was estimated to have a service life of 20 years and a salvage value of $71,400. Bridgeport's accounting period is the calendar year. Your answer is partially correct. Try again. Compute the depreciation for this asset for 2017 and 2018 using the sum-of-the-years'-digits method. (Round answers to 0 decimal places, e.g. 45,892. Depreciation for 2017 Depreciation for 2018 Click if you would like to Show Work for this question: Open Show Work 55335 70091 Attempts: 4 of 5 used SAVE FOR ATER SUBMIT ANSWER SUBMIT ANSWER ? (b) Your answer is incorrect. Try again. Compute the depreciation for this asset for 2017 and 2018 using the double-declining-balance method. (Round answers to O decimal places, e.g. 45,892.) Depreciation for 2017 Depreciation for 2018 58102 68659 Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

(a) Sum of years digit method

Depreciation Year 2017 = ($846090 - $71400) * 20/210 * 9/12 = $55,335

Depreciation Year 2018 = ($846090 - $71400) * 19/210 = $70,091

(b) Double Declining Balance Method

Double Declining Depreciation = 2 x Straight Line Depreciation Rate x Book Value Beginning

Straight Line Depreciation Rate = 1 / Usefull life

                                                = 1/20 Years

                                                = 0.05

Depreciation for the year 2017 = 2 x 0.05 x $8,46,090 x 9/12 = $63,457

Depreciation for the year 2017 = 2 x 0.05 x ($8,46,090 - $63,457) = $78,263

Note : The depreciation amount which calculated using Sum of years digit method is as same as the amount shown in the answer box but it showing as incorrect...I am getting the same figure.

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