Question
In: Accounting
Depreciation by Two Methods A storage tank acquired at the beginning of the fiscal year at...
Depreciation by Two Methods
A storage tank acquired at the beginning of the fiscal year at a cost of $126,000 has an estimated residual value of $7,500 and an estimated useful life of 5 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. Do not round the double-declining balance rate. If required, round your answers to the nearest dollar.
| Depreciation | |
| Year 1 | $ |
| Year 2 | $ |
Solutions
Expert Solution
a.
| Straight Line Depreciation | ||||
| (Cost - Residual Value) | / | Useful Life | = | Annual Depreciation |
| (126,000 - 7,500) | / | 5 | = | $ 23,700.00 |
b.
| Double Declining Balance Depreciation | |||||
| Beginning book value | x | Double the straight- | = | Depreciation expense | |
| line rate | |||||
| Year 1 | $ 126,000.00 | x | 40% | = | $ 50,400.00 |
| Year 2 | $ 75,600.00 | x | 40% | = | $ 30,240.00 |
| Explanation: | |||||
| Double-declining-balance rate = (100% / 5 years) × 2 = 40% per year | |||||
| Book value at beginning of year 2 = $126,000 - $50,400 = $75,600 | |||||
ekkarill92 answered 1 year agoRelated Solutions
A storage tank acquired at the beginning of the fiscal year at a cost of $104,400...
A storage tank acquired at the beginning of the fiscal year at a
cost of $104,400 has an estimated residual value of $6,400 and an
estimated useful life of four years.
a. Determine the amount of annual depreciation
by the straight-line method.
$fill in the blank 1
b. 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. If
required, round your answers to the nearest dollar....
A company acquired a truck for $79,000 at the beginning of the fiscal year. It has...
A company acquired a truck for $79,000 at the beginning of the
fiscal year. It has a useful life of 5 years and a residual value
of $9,000. The company uses the straight-line method of
depreciation. After owning the truck for 2 years, the company sold
it for $34,000. (a) Determine depreciation expense for each of the
first 2 years, and (b) determine the gain or loss resulting from
the sale.
At the beginning of the year, Robinson County acquired a new storage building under a capital...
At the beginning of the year, Robinson County acquired a new
storage building under a capital lease agreement.
An initial payment of $700,000 is made to start the lease with
four subsequent payments for the same amount at the end of each
year starting in late 20X7.
The total lease payment amount for the duration of the lease is
$3,500,000.
The present value of the lease at the inception is $3,485,000,
including the initial payment. The county borrowed the funds...
New lithographic equipment, acquired at a cost of $940,000 at the beginning of a fiscal year,...
New lithographic equipment, acquired at a cost of $940,000 at
the beginning of a fiscal year, has an estimated useful life of
five years and an estimated residual value of $105,750. The manager
requested information regarding the effect of alternative methods
on the amount of depreciation expense each year. On the basis of
the data presented to the manager, the double-declining-balance
method was selected. In the first week of the fifth year, the
equipment was sold for $151,924. Required: 1....
New lithographic equipment, acquired at a cost of $800,000 at the beginning of a fiscal year,...
New lithographic equipment, acquired at a cost of $800,000 at
the beginning of a fiscal year, has an estimated useful life of
five years and an estimated residual value of $90,000. The manager
requested information regarding the effect of alternative methods
on the amount of depreciation expense each year. On the basis of
the data presented to the manager, the double-declining-balance
method was selected.
In the first week of the fifth year, the equipment was sold for
$134,570.
Required:
1....
Depreciation by Two Methods A Kubota tractor acquired on January 8 at a cost of $85,000...
Depreciation by Two Methods
A Kubota tractor acquired on January 8 at a cost of $85,000 has
an estimated useful life of 10 years. Assuming that it will have no
residual value.
a. Determine the depreciation for each of the
first two years by the straight-line method.
First Year
Second Year
$
$
b. Determine the depreciation for each of the
first two years by the double-declining-balance method.
First Year
Second Year
$
$
Depreciation by Two Methods; Sale of Fixed Asset New lithographic equipment, acquired at a cost of...
Depreciation by Two Methods; Sale of Fixed Asset
New lithographic equipment, acquired at a cost of $718,750 on
March 1 of Year 1 (beginning of the fiscal year), has an estimated
useful life of five years and an estimated residual value of
$61,800. The manager requested information regarding the effect of
alternative methods on the amount of depreciation expense each
year.
On March 4 of Year 5, the equipment was sold for $105,300.
Required:
1. Determine the annual depreciation expense...
Depreciation by Two Methods; Sale of Fixed Asset New lithographic equipment, acquired at a cost of...
Depreciation by Two Methods; Sale of Fixed Asset
New lithographic equipment, acquired at a cost of $656,250 on
March 1 of Year 1 (beginning of the fiscal year), has an estimated
useful life of five years and an estimated residual value of
$56,400. The manager requested information regarding the effect of
alternative methods on the amount of depreciation expense each
year.
On March 4 of Year 5, the equipment was sold for $96,100.
Required:
1. Determine the annual depreciation expense...
Depreciation by Two Methods; Sale of Fixed Asset New lithographic equipment, acquired at a cost of...
Depreciation by Two Methods; Sale of Fixed Asset
New lithographic equipment, acquired at a cost of $625,000 on
March 1 of Year 1 (beginning of the fiscal year), has an estimated
useful life of five years and an estimated residual value of
$53,700. The manager requested information regarding the effect of
alternative methods on the amount of depreciation expense each
year.
On March 4 of Year 5, the equipment was sold for $91,500.
Required:
1. Determine the annual depreciation expense...
Depreciation by Two Methods; Sale of Fixed Asset New tire retreading equipment, acquired at a cost...
Depreciation by Two Methods; Sale of Fixed Asset
New tire retreading equipment, acquired at a cost of $812,500 on
September 1 at the beginning of a fiscal year, has an estimated
useful life of five years and an estimated residual value of
$69,900. The manager requested information regarding the effect of
alternative methods on the amount of depreciation expense each
year. On the basis of the data presented to the manager, the
double-declining-balance method was selected.
In the first week...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Discuss intangibility, inseparability, contingent consumption and heterogeneity features of financial services marketing
- Steam used to sterilize fermentation equipment is piped 20 m from a factory boiler room through...
- Research supports the idea that - 30 minutes of activity is optimal for weight loss -...
- Instructions: Complete the following case study and upload it to the assignment section prior to the...
- Compare and contrast two of the personality theories in psychology. (250 words)
- Language:c++ choice b and c dont display the file rearranged why is that and how can...
- In Python Write a function to read a Sudoku board from an input string. The input...
ADVERTISEMENT