Exercise 11-9 Presented below is information related to Crane Manufacturing Corporation. Asset Cost Estimated Salvage Estimated...

Exercise 11-9 Presented below is information related to Crane Manufacturing Corporation. Asset Cost Estimated Salvage Estimated Life (in years) A $48,195 $6,545 10 B 39,984 5,712 9 C 42,840 4,284 9 D 22,610 1,785 7 E 27,965 2,975 6 Compute the rate of depreciation per year to be applied to the plant assets under the composite method. (Round answer to 2 decimal place, e.g. 4.83%.) Composite rate %

Expert Solution

Assets	Original cost	Salvage value	Depreciable cost	Depriciable Life	Straight line depn per year(Depreciable cost/Depreciable Life)
A	48,195	6,545	41,650	10	4,165
B	39,984	5,712	34,272	9	3,808
C	42,840	4,284	38,556	9	4,284
D	22,610	1,785	20,825	7	2,975
E	27,965	2,975	24,990	6	4,165
Total	181,594	21,301	160,293		19,397

	Composite Rate	=	Total depreciation per year / Total original cost
		=	19397/181594
		=	10.68%

	Composite life	=	Total depreciable cost / Total depreciation per year
		=	160,293/19397
		=	8.26

ekkarill92 answered 2 years ago

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