On January 2, 2018, the Jackson Company purchased equipment to be used in its ma

Question

On January 2, 2018, the Jackson Company purchased equipment to be used in its manufacturing process. The equipment has an estimated life of eight years and an estimated residual value of $46,875. The expenditures made to acquire the asset were as follows Purchase price Freight charges Installation charges $209,000 6,000 9,000 Jackson's policy is to use the double-declining-balance (DDB) method of depreciation in the early years of the equipment's life and then switch to straight line halfway through the equipment's life Required 1. Calculate depreciation for each year of the asset's eight-year life Depreciation for the Period End of Period Beginning of Period Book Depreciation Annual Depreciation Depreciation umulated Book Value Year Rate Value 2018 2019 2020 2021 2022 2023 2024 2025

Explanation / Answer

Calculate depreciation :

Double decline rate = 100/8*2 = 25%

Halfway dep of last = (70875-46875/4) =

Depreciation for the period End of period Year Beginning of periof book value Depreciation rate Annual depreciation Accumlated depreciation Book value 2018 224000 25% 56000 56000 168000 2019 168000 25% 42000 98000 126000 2020 126000 25% 31500 129500 94500 2021 94500 25% 23625 153125 70875 2022 70875 6000 159125 64875 2023 64875 6000 165125 58875 2024 58875 6000 171125 52875 2025 52875 6000 177125 46875

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.