Problem 9-9A (Part Level Submission) Ayayai Corporation purchased machinery on J
ID: 2609827 • Letter: P
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Problem 9-9A (Part Level Submission)
Ayayai Corporation purchased machinery on January 1, 2017, at a cost of $250,000. The estimated useful life of the machinery is 4 years, with an estimated salvage value at the end of that period of $24,000. The company is considering different depreciation methods that could be used for financial reporting purposes.
(a)
STRAIGHT-LINE DEPRECIATION
Computation
End of Year
Years
Depreciable Cost
Depreciation Rate
Annual Depreciation Expense
Accumulated Depreciation
Book Value
2017
2018
2019
2020
DOUBLE-DECLINING-BALANCE DEPRECIATION
Computation
End of Year
Years
Book Value Beginning of Year
Depreciation Rate
Annual Depreciation Expense
Accumulated Depreciation
Book Value
2017
2018
2019
2020
7,250
Can I get some help on this one, thanks
Problem 9-9A (Part Level Submission)
Ayayai Corporation purchased machinery on January 1, 2017, at a cost of $250,000. The estimated useful life of the machinery is 4 years, with an estimated salvage value at the end of that period of $24,000. The company is considering different depreciation methods that could be used for financial reporting purposes.
(a)
Prepare separate depreciation schedules for the machinery using the straight-line method, and the declining-balance method using double the straight-line rate.STRAIGHT-LINE DEPRECIATION
Computation
End of Year
Years
Depreciable Cost
xDepreciation Rate
=Annual Depreciation Expense
Accumulated Depreciation
Book Value
2017
$enter a dollar amount enter a Depreciation Rate in percentages % $enter a dollar amount $enter a dollar amount $enter a dollar amount2018
enter a dollar amount enter a Depreciation Rate in percentages % enter a dollar amount enter a dollar amount enter a dollar amount2019
enter a dollar amount enter a Depreciation Rate in percentages % enter a dollar amount enter a dollar amount enter a dollar amount2020
enter a dollar amount enter a Depreciation Rate in percentages % enter a dollar amount enter a dollar amount enter a dollar amount $enter a total for the Annual Depreciation Expense column in dollarsDOUBLE-DECLINING-BALANCE DEPRECIATION
Computation
End of Year
Years
Book Value Beginning of Year
×Depreciation Rate
=Annual Depreciation Expense
Accumulated Depreciation
Book Value
2017
$enter a dollar amount enter a Depreciation Rate in percentages % $enter a dollar amount $enter a dollar amount $enter a dollar amount2018
enter a dollar amount enter a Depreciation Rate in percentages % enter a dollar amount enter a dollar amount enter a dollar amount2019
enter a dollar amount enter a Depreciation Rate in percentages % enter a dollar amount enter a dollar amount enter a dollar amount2020
enter a dollar amount enter a Depreciation Rate in percentages %7,250
* enter a dollar amount enter a dollar amount $enter a total for the Annual Depreciation Expense column in dollars* Depreciation expense for 2020 under Double declining-balance is adjusted so that ending book value is equal to salvage value.
Can I get some help on this one, thanks
Explanation / Answer
(A) Depreciation Schedules Under Straight line method Depreciation rate under straight line method = 1/ Useful life of asset =1/4 =25% Depreciable cost = Cost of the Asset - Salvage value =$250,000 -$24000 =$226,000 End of the year Year Depreciable cost X Depreciation rate =Annual Depreciation Expense Accumulated Depreciation Book Vlaue 2017 $226000 X 25% =$56500 $56500 $193500 (250,000-56500) 2018 $226000 X 25% =$56500 $113000 $137000 (193500-56500) 2019 $226000 X 25% =$56500 $169500 $80500 (137000-56500) 2020 $226000 X 25% =$56500 $226000 $24000 (80500-56500) (B) Depreciation Schedules Under Double declaing balance method Depreciation rate under Double declaing Balance method =2* Straight line ethod =2*25% =50% Double Declaing balance method Computation End of the year Year Book Value Beginning of the year X Depreciation rate = Annual Depreciation Accumulated Depreciation Book Vlaue 2017 $250,000 X50% =$125000 $125000 $125000 2018 $125000 X50% =$62500 $187500 $62500 2019 $62500 X50% =$31250 $218750 $31250 2020 $31250 =$7250 $226,000 $24000 **2020 Depreciation adjusted to salavage value of the Asset = Book Vlaue beginning 2020 - Salvage value =$31250 - $24000 =$7250
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