Question

In: Accounting

Computer the Depreciation Schedule by using SLD, SOYD, and DDB methods the university pursed a lab...

Computer the Depreciation Schedule by using SLD, SOYD, and DDB methods

the university pursed a lab Mass-Spectrometer that has 5 years depreciable life. The instrument costs school $900 with a Salvage Value of $70 after the end of the service life.

1-Built a Depreciation Schedule for this asset by all three methods

2-Build a graphic of each method

3-Which method will you recommend to the university and why?

Solutions

Expert Solution

SLD
Year Depreciation for the year Written down value
1 $                                          166 $                               734
2 $                                          166 $                               568
3 $                                          166 $                               402
4 $                                          166 $                               236
5 $                                          166 $                                 70
SOYD
Year Remaining years of use full life SYOD Applicable % Depreciation for the year Written down value
1 5 15 33% $                                    276.67 $                         623.33
2 4 15 27% $                                    221.33 $                         402.00
3 3 15 20% $                                    166.00 $                         236.00
4 2 15 13% $                                    110.67 $                         125.33
5 1 15 7% $                                      55.33 $                           70.00
DDB
Year Depreciation for the year Written down value
1 $                                    360.00 $                         540.00
2 $                                    216.00 $                         324.00
3 $                                    129.60 $                         194.40
4 $                                      77.76 $                         116.64
5 $                                      46.64 $                           70.00
SLD
Year Depreciation for the year Written down value
1 =(900-70)/5 =900-B3
2 =(900-70)/5 =C3-B4
3 =(900-70)/5 =C4-B5
4 =(900-70)/5 =C5-B6
5 =(900-70)/5 =C6-B7
SOYD
Year Remaining years of use full life SYOD Applicable % Depreciation for the year Written down value
1 5 =(B11*(B11+1))/2 =B11/C11 =D11*(900-70) =900-E11
2 4 15 =B12/C12 =D12*(900-70) =F11-E12
3 3 15 =B13/C13 =D13*(900-70) =F12-E13
4 2 15 =B14/C14 =D14*(900-70) =F13-E14
5 1 15 =B15/C15 =D15*(900-70) =F14-E15
DDB
Year Depreciation for the year Written down value
1 =900*(2/5) =900-B20
2 =C20*(2/5) =C20-B21
3 =C21*(2/5) =C21-B22
4 =C22*(2/5) =C22-B23
5 =C23-70 =C23-B24

we recommend DDB method as the school will get depreciation benefit more in earler years.


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