v2. ngageNowv2 1 Online teaching and learning resource from Cengage Leaming PR09
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v2. ngageNowv2 1 Online teaching and learning resource from Cengage Leaming PR0904 ALCO (Algorithmic) om/ilrn/takeAssig Depreciation by Two Methods; Sale of Fixed Asset New lithographic equipment, acquired requested information regarding the efflect of alternative methods on the amount of depreciation expense each year. On the basis of the data presented to the manager, the double-dedining-balance method was selected. at a cost of $812,500 on March 1 at the beginning of a fiscal year, has an estimated useful life of five years and an estimated residual value of $69,900. The manager In the first week of the fifth year, on March 4, the equipment was sold for $119,000 Required 1. Determine the annual depreciation expense for each of the estimated five years of use, the accumslated depreciation at the end of each year, and the book value of the equipment at the end of each year by the following methods: a. Straight-line method Accumulated Depreciation, End of Year Book Value End of Year Expense g-balance method Dook Value MacBook AirExplanation / Answer
Purchase Price 812500 Estimated Residual Value 69900 Straight Line Method Year Depreciation Expense Accumulated Depreciation, end of the year Book Value, end of the year 1 148520 148520 663980 2 148520 297040 515460 3 148520 445560 366940 4 148520 594080 218420 5 148520 742600 69900 Double Declining Method Year Depreciation Expense Accumulated Depreciation, end of the year Book Value, end of the year 1 325000 325000 487500 2 195000 520000 292500 3 117000 637000 175500 4 70200 707200 105300 5 35400 742600 69900 In double declining method depreceiation rate is 2*Straight Line Method Rate In given question depreciation rate in Straight line method is 20% and so in Double declininh method it is 40%
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