Question

For each of the following plant assets: 1. Calculate the amount to be depreciated. 2. Calculate...

For each of the following plant assets:
1. Calculate the amount to be depreciated.
2. Calculate the annual depreciation expense using the straight line method.
3. Calculate the depreciation expense for the first year.

Plant Asset Monthly Owned First Year Original Cost Estimated Disposal Value Estimated Useful Life
1. Computer 4 $10,000 1,000 3 years
2. Table 2 $13,000 1,700 7 years
3. Delivery Van 9 $60,000 11,000 15 years
4. Chairs 6 $12,000 1,300 10 years
5. Laptop 11 $40,000 1,000 4 years

Homework Answers

Answer #1
Plant Asset Monthly Owned First Year Original Cost Estimated Disposal Value Estimated Useful Life Amount to be depreciated Annual Depreciation expense Depreciation for the 1st year
[1] [2] [3] [4] [5] [6] [7] [8]
1. Computer 4 $10,000 1,000 3 years $9,000 $3,000 $1,000
2. Table 2 $13,000 1,700 7 years $11,300 $1,614 $269
3. Delivery Van 9 $60,000 11,000 15 years $49,000 $3,267 $2,450
4. Chairs 6 $12,000 1,300 10 years $10,700 $1,070 $535
5. Laptop 11 $40,000 1,000 4 years $39,000 $9,750 $8,938
Note:
Amount to be depreciated = Col 3 - Col 4
Annual depreciation = Col 6/Col 5
Depreciation for the 1st year - [Col 7*Col 2]/12

Col 2 Data is taken as number of months the asset was in service in the 1st year.

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