In: Accounting
Equipment purchased at the beginning of the fiscal year for $360,000 is expected to have a useful life of 5 years, or 14,000 operating hours, and a residual value of $10,000. Compute the depreciation for the first and second years of use by each of the following methods: |
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Straight Line Depreciation - Full Year Depreciation | ||||||||||||
Year | Cost |
Accum Depr at Beg of Year |
Book Value at Beg of Year |
Straight Line Rate |
Depr for Year |
Book Value at End of Year |
||||||
1 | $360,000.00 | $0.00 | $360,000.00 | x | ||||||||
2 | 360,000 | 0 | 360,000 | x | ||||||||
3 | 360,000 | 0 | 360,000 | x | ||||||||
4 | 360,000 | 0 | 360,000 | x | ||||||||
5 | 360,000 | 0 | 360,000 | x | ||||||||
0% | ||||||||||||
Units of Output - Full Year Depreciation | ||||||||||||
Year | Cost |
Accum Depr at Beg of Year |
Book Value at Beg of Year |
Units of Activity |
Cost Per Unit |
Depr for Year |
Book Value at End of Year |
|||||
1 | $360,000.00 | $0.00 | $360,000.00 | x | 1,200 | |||||||
2 | 360,000 | 0 | 360,000 | x | 2,250 | |||||||
3 | 360,000 | 0 | 360,000 | x | 3,000 | |||||||
4 | 360,000 | 0 | 360,000 | x | 4,350 | |||||||
5 | 360,000 | 0 | 360,000 | x | 3,200 | |||||||
14,000 | ||||||||||||
Double Declining Balance - Full Year Depreciation | ||||||||||||
Year | Cost |
Accum Depr at Beg of Year |
Book Value at Beg of Year |
Double Declining Balance Rate |
Depr for Year |
Book Value at End of Year |
||||||
1 | $360,000.00 | $0.00 | $360,000.00 | x | ||||||||
2 | 360,000 | 0 | 360,000 | x | ||||||||
3 | 360,000 | 0 | 360,000 | x | ||||||||
4 | 360,000 | 0 | 360,000 | x | ||||||||
5 | 360,000 | 0 | 360,000 | x |
Straight Line Depreciation - Full Year Depreciation | ||||||||||||
Year | Cost |
Accum Depr at Beg of Year |
Book Value at Beg of Year |
Straight Line Rate |
Depr for Year |
Book Value at End of Year |
||||||
1 | $360,000.00 | $0.00 | $360,000.00 | x | 20% | 350000*20% = 70000 | 360000-70000 = 290000 | |||||
2 | 360,000 | 70000 | 290000 | x | 20% | 70000 | 220000 | |||||
3 | 360,000 | 70000 | 220000 | x | 20% | 70000 | 150000 | |||||
4 | 360,000 | 70000 | 150000 | x | 20% | 70000 | 80000 | |||||
5 | 360,000 | 70000 | 80000 | x | 20% | 70000 | 10000 | |||||
0% | ||||||||||||
Units of Output - Full Year Depreciation | ||||||||||||
Year | Cost |
Accum Depr at Beg of Year |
Book Value at Beg of Year |
Units of Activity |
Cost Per Unit |
Depr for Year |
Book Value at End of Year |
|||||
1 | $360,000.00 | $0.00 | $360,000.00 | x | 1,200 | 25 | 30000 | 330000 | ||||
2 | 360,000 | 30000 | 330000 | x | 2,250 | 25 | 56250 | 273750 | ||||
3 | 360,000 | 56250 | 273750 | x | 3,000 | 25 | 75000 | 198750 | ||||
4 | 360,000 | 75000 | 198750 | x | 4,350 | 25 | 108750 | 90000 | ||||
5 | 360,000 | 108750 | 90000 | x | 3,200 | 25 | 80000 | 10000 | ||||
14,000 | ||||||||||||
Double Declining Balance - Full Year Depreciation | ||||||||||||
Year | Cost |
Accum Depr at Beg of Year |
Book Value at Beg of Year |
Double Declining Balance Rate |
Depr for Year |
Book Value at End of Year |
||||||
1 | $360,000.00 | $0.00 | $360,000.00 | x | 40% | 144000 | 216000 | |||||
2 | 360,000 | 144000 | 216000 | x | 40% | 86400 | 129600 | |||||
3 | 360,000 | 230400 | 129600 | x | 40% | 51840 | 77760 | |||||
4 | 360,000 | 282240 | 77760 | x | 40% | 31104 | 46656 | |||||
5 | 360000 | 313344 |
46656 |
* | 40% | 36656 | 10000 |