tpx - Google Chrome tpx connect dow shows what is correct and incorrect for the
ID: 2577448 • Letter: T
Question
tpx - Google Chrome tpx connect dow shows what is correct and incorrect for the work you have completed so far al ofthe work you have done sotescorrect you may havepleted emerg 25.00 points In early January 2015, New/lech purcharses computer equpment for 5188 000 b use n for the next four years it estimates the equpments salvage vialue ar $43 000 operating actvties Prepare a table showing deprecation and book valur for each of the four years assuming double dedlining Answer is complete but irely correct. End of Period Book Value 2015 2016 2017 2018 88000 4 000 47 00 23.500 1750176 250 11250 O Waiting for cache. F11 Prtsc Paus Del ome Pg U F9 FIO Scr Lk SysRq "Break Backspace 0Explanation / Answer
Yes there is some incorrect calculation for year 2017 and 2018;
Following information are given in the question;
Purchase price is $188000
Salvage value is $43000
Useful life is 4 years
Rate of depreciation will be calculated as follow;
1 / 4 = .25 * 2 = 50%
So on the basis of above detail it is clear that accumulated depreciation can be upto maximum ($188000 - $43000) = $145000
So let’s see the depreciation and accumulated depreciation for each year;
Double Declining Balance Method
Depreciation for the period
End of period
Year
Beginning year book balance
Depreciation rate
Annual depreciation
Accumulated depreciation
Year end book value
2015
$188000
50%
$94000
$94000
$94000
2016
$94000
50%
$47000
$141000
$47000
2017
$47000
50%
$4000
$145000
$43000
2018
$43000
50%
Nil
$145000
$43000
Total
$145000
Working Note:
Depreciation for Year 2017 is calculated as follow;
$47000 * 50 / 100 = $23500 but we see that maximum limit for accumulated depreciation is $145000 thus depreciation for year 2017 will be ($145000 - $141000) = $4000
Double Declining Balance Method
Depreciation for the period
End of period
Year
Beginning year book balance
Depreciation rate
Annual depreciation
Accumulated depreciation
Year end book value
2015
$188000
50%
$94000
$94000
$94000
2016
$94000
50%
$47000
$141000
$47000
2017
$47000
50%
$4000
$145000
$43000
2018
$43000
50%
Nil
$145000
$43000
Total
$145000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.