Sullivan Ranch Corporation has purchased a new tractor. The following informatio
ID: 2524198 • Letter: S
Question
Sullivan Ranch Corporation has purchased a new tractor. The following information is given: S 150,000 10,000 Cost: Estimated Residual: Estimated Life in years Estimated Life in hours: Actual Hours 1200 Year 1 Year 2 Year 3 Year 4 360 270 350 220 Prepare the following Straight Line depreciation schedule by using the excel SLN FUNCTION (fx) to calculate the Depreciation Expense for Years 1-4 in the Depreciation Expense column. Enter formulas or absolute cell references for the remaining cells. IVAN RANCH CORPORAT Depreciation Accumulated De Year Book Value Ex ation Tota Prepare the following U Use absolute cell references when a n deprec iation schedule by entering formulas. ppropriate VAN RANCH CORPORAT Depreciation Accumulated Year Book Value atio Tota Prepare the following Double-Declining-Balance depreciation schedule by using the Excel DDB FUNCTION (fx) to c Depreciation Expense for Years 1-4 in the Depreciation Expense column. Enter formulas or absolute cell references for the remaining cells IVAN RANCH CORPORAT Depreciation Accumulated De Year Book Value Ex ation TotalExplanation / Answer
CALCULATION OF THE DEPRECIATION AS PER STRAIGHT LINE METHOD Purchase Cost of Tractor $ 1,50,000.00 Less: Salvage Value $ 10,000.00 Net Value for Depreciation $ 1,40,000.00 Usefule life of the Assets 4 years Depreciation per year = Value for Depreciation / 4 years = 35,000.00 Total Depreciation in 4 years = ($ 59,375 X 4)= 1,40,000.00 DEPRECIATION SCHEDULE WITH STRIAGHT LINE METHOD Year Depreciation Expenses Accumulated Depreciation Book Value 1 $ 35,000.00 $ 35,000.00 $ 1,15,000.00 2 $ 35,000.00 $ 70,000.00 $ 80,000.00 3 $ 35,000.00 $ 1,05,000.00 $ 45,000.00 4 $ 35,000.00 $ 1,40,000.00 $ 10,000.00 CALCULATION OF THE DEPRECIATION AS PER UNITS OF OUTPUT METHOD Purchase Cost of Truck $ 1,50,000.00 Less: Salvage Value $ 10,000.00 Net Value for Depreciation $ 1,40,000.00 Expected to produce units 1,200.00 Hours Depreciation per Hours = 116.67 Per Hours ($ 140,000 / 1200 Hours) Depreciation for Year 1 = (360 Hrs * $ 116.67) $ 42,000 Depreciation for Year 2 = (270 Hrs * $ 116.67) $ 31,500 Depreciation for Year 3 = (350 Hrs * $ 116.67) $ 40,833 Depreciation for Year 4 = (220 Hrs * $ 116.67) $ 25,667 Total Depreciation Charged = 1,40,000.00 DEPRECIATION SCHEDULE WITH UNIT OF PRODUCTION METHOD Year Depreciation Expenses Accumulated Depreciation Book Value 1 $ 42,000 $ 42,000.00 $ 1,08,000.00 2 $ 31,500 $ 73,500.00 $ 76,500.00 3 $ 40,833 $ 1,14,333.33 $ 35,666.67 4 $ 25,667 $ 1,40,000.00 $ 10,000.00 CALCULATION OF THE DEPRECIATION AS PER DOUBLE DECLINE METHOD Purchase Cost of Machine $ 1,50,000.00 Useful Life = 4 years Depreciation per year = $ 37,500.00 (Purchase price / Useful life) Rate of Depreciation = Rate of Depreciation = (1 / 4 Years ) 0.25 or 25% (Depreication / Purchase price ) Double decline deprection rate = 25% * 2 = 50.0% Purchase Value of the Assets $ 1,50,000.00 Depreciation for the year 1(A) $ 75,000.00 Closing balance for the year1 $ 75,000.00 Opening Balance for the year 2 $ 75,000.00 Depreciation for the year 2 @ 50% =(B) $ 37,500.00 Closing Balance of the year 2 $ 37,500.00 Opening Balance for the year 3 $ 37,500.00 Depreciation for the year 3 @ 50% = (Ç) $ 18,750.00 Closing Balance of the year 3 $ 18,750.00 Opening Balance for the year 4 $ 18,750.00 Depreciation for the year 4 @ 50% = (D) $ 9,375.00 Total Depreciation charged = (A+ B+ C+ D) $ 1,40,625.00 DEPRECIATION SCHEDULE WITH DOUBLE DECLINE METHOD Year Depreciation Expenses Accumulated Depreciation Book Value 1 $ 75,000 $ 75,000.00 $ 75,000.00 2 $ 37,500 $ 1,12,500.00 $ 37,500.00 3 $ 18,750 $ 1,31,250.00 $ 18,750.00 4 $ 9,375 $ 1,40,625.00 $ 9,375.00
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.