Cutter Enterprises purchased equipment for $96,000 on January 1, 2018. The equipment is expected to have...

Cutter Enterprises purchased equipment for $96,000 on January 1, 2018. The equipment is expected to have a five-year life and a residual value of $4,500.

Using the sum-of-the-years'-digits method, depreciation for 2019 and book value at December 31, 2019, would be?

Expert Solution

1)depreciation for 2019 =$24,400.

2)book value at December 31, 2019= $41,100.

Year	Depreciable base	Formula	Depreciation expense	Accumulated Depreciation	Ending Book Value
2018	91,500	(([91,500x5/15]/)	$ 30,500	30,500	$ 65,500
2019	94,500	(([95100x4/15]/)	$ 24,400	54,900	$ 41,100

Sum-of-the-Years'-Digits Method
A	Cost	$ 96,000.00
B	Residual Value	$ 4,500.00
C=A - B	Depreciable base	$ 91,500.00
	Sum of digits with 5 years (5+4+3+2+1)	15

ekkarill92 answered 2 years ago

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