Question

Windsor Inc. owns the following assets. Asset Cost Salvage Estimated Useful Life A $70,800 $7,080 10...

Windsor Inc. owns the following assets.

Asset

Cost

Salvage

Estimated Useful Life
A $70,800 $7,080 10 years
B 51,200 5,120 5 years
C 88,560 4,320 12 years


Compute the composite depreciation rate and the composite life of Windsor’s assets. (Round answers to 1 decimal place, e.g. 4.8% or 4.8 years.)

Composite depreciation rate %
Composite life years
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Homework Answers

Answer #1
Depreciation on Asset A= (70800-7080)/10=6372
Depreciation on Asset B= (51200-5120)/5=9216
Depreciation on Asset A= (88560-4320)/10=8424
Total Depreication=6372+9216+8424=24012
Total Historical Cost =70800+51200+88560=210560
Composite Depreciaiton Rate= Total Depreciation/ Historical Cost
=(24012/210560)=11.40%
Composite Life= Total Depreciable Cost/Depreciation epr Year
=194040/24012=8.08 year
* Depreciable Cost = (70800-7080)+(51200-5120)+(88560-4320)=194040
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