Question

Depreciation by two methods A Kubota tractor acquired on January 8 at a cost of $95,000 has an estimated useful life of 4 years. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

Assuming that it will have no residual value, determine the depreciation for each of the first two years:

by the straight-line method. Round your answers to the nearest dollar.

First Year $

Second Year $

by the double-declining-balance method. Round your answers to the nearest dollar.

First Year $

Second Year $

Answer #1

**Straight Line Method**

Year 1 | 23750 |

Year 2 | 23750 |

The cost = 95000

Useful Year = 4 years

Asset has no salvage value, so asset depreciable base equals to 95000

Yearly depreciation = Depreciation Base / Use ful life

= 95000 / 4 = 23750 in whole 4 years

**Double Declining Method**

Year 1 | 47500 |

Year 2 | 23750 |

Under double declining method we will use double the rate of depreciation when use straight line method. Under straight line method we will write off as depreciation yearly 25% of the depreciable value. Asset has 4 years life .

Under DDB Method double rate. That is 50% . and calculate yearly on Net Book Value of each year

For Year 1

95000 x 50% = 47500

For Year 2

Net book value = Cost - Depreciation Year 1

=95000 - 47500 = 47500

Depreciation = 47500 x 50% = 23750

A Kubota tractor acquired on January 8 at a cost of $62,000 has
an estimated useful life of 10 years.
This information has been collected in the Microsoft Excel
Online file. Open the spreadsheet, perform the required analysis,
and input your answers in the questions below.
Open spreadsheet
Assuming that it will have no residual value, determine the
depreciation for each of the first two years:
by the straight-line method. Round your answers to the nearest
dollar.
First Year
Second...

Partial-year depreciation
DATA
Cost
$100,000
Estimated residual value
$6,000
Estimated useful life (in years)
8
Placed into service on
May 1
End on the fiscal year
December 31
Using formulas and cell references, perform the required analysis,
and input your answers into the Amounts column. Transfer the
numeric results for the green entry cells (C13:C16) into the
appropriate fields in CNOWv2 for grading.
Amounts
Formulas
a.
Depreciation (Straight-line method), Year 1
Depreciation (Straight-line method), Year 2
b.
Depreciation (DDB method),...

Depreciation by Two Methods
Equipment acquired at the beginning of the fiscal year at a cost
of $118,800 has an estimated residual value of $7,000 and an
estimated useful life of 10 years.
a. Determine the amount of annual depreciation
by the straight-line method.
$
b. Determine the amount of depreciation for the
first and second years computed by the double-declining-balance
method.

Depreciation by Two Methods
Equipment acquired at the beginning of the fiscal year at a cost
of $360,000 has an estimated residual value of $45,000 and an
estimated useful life of 10 years.
a. Determine the amount of annual depreciation
by the straight-line method.
$_____________
b. Determine the amount of depreciation for the
first and second years computed by the double-declining-balance
method.
Depreciation
Year 1
$__________
Year 2
$__________

A storage tank acquired at the beginning of the fiscal
year at a cost of $129,600 has an estimated residual value of
$11,000 and an estimated useful life of 10 years. Determine the
amount of depreciation for the first and second years computed by
the double-declining-balance method. Do not round the
double-declining balance rate. Round your answers to the nearest
dollar.
Depreciation
Year 1
$
Year 2
$

Exercise 7-49 (Algorithmic)
Depreciation Methods Clearcopy, a printing company, acquired a
new press on January 1, 2019. The press cost $171,600 and had an
expected life of 8 years or 4,500,000 pages and an expected
residual value of $15,000. Clearcopy printed 683,500 pages in 2019.
Do not round intermediate calculations. If required, round your
answers to the nearest whole dollar. Required:
1. Compute 2019 depreciation expense using the: 2019
a. Straight-line method
b. Double-declining-balance method
c. Units-of-production method
2. What...

A fleet of refrigerated delivery trucks is acquired on January
5, 2017, at a cost of $830,000 with an estimated useful life of
eight years and an estimated salvage value of $75,000.
Compute the depreciation expense for the first three years using
the double-declining-balance method. (Round your answers to
the nearest dollar.)
Depreciation for the Period
End of Period
Annual Period
Beginning of Period Book Value
Depreciation Rate (%)
Depreciation Expense
Accumulated Depreciation
Book Value
First Year
Second Year
Third...

A building is acquired on January 1, at a cost of $970,000 with
an estimated useful life of 8 years and salvage value of $87,300.
Compute depreciation expense for the first three years using the
double-declining-balance method. (Round your answers to the nearest
dollar.)

A building is acquired on January 1, at a cost of $970,000 with
an estimated useful life of 8 years and salvage value of $87,300.
Compute depreciation expense for the first three years using the
double-declining-balance method. (Round your answers to the nearest
dollar.)

Comparing three depreciation methods
Dexter Industries purchased packaging equipment on January 8 for
$112,500. The equipment was expected to have a useful life of three
years, or 22,500 operating hours, and a residual value of $4,500.
The equipment was used for 9,000 hours during Year 1, 6,750 hours
in Year 2, and 6,750 hours in Year 3.
Required:
1. Determine the amount of depreciation expense
for the three years ending December 31, by (a) the straight-line
method, (b) the units-of-activity...

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