Partial-Year Depreciation Equipment acquired at a cost of $99,000 has an estimated residual value of $6,000...

Partial-Year Depreciation

Equipment acquired at a cost of $99,000 has an estimated residual value of $6,000 and an estimated useful life of 10 years. It was placed into service on April 1 of the current fiscal year, which ends on December 31.

If necessary, round your answers to the nearest cent.

a. Determine the depreciation for the current fiscal year and for the following fiscal year by the straight-line method.

	Depreciation
Year 1	$
Year 2	$

b. Determine the depreciation for the current fiscal year and the following fiscal year by the double-declining-balance method.

	Depreciation
Year 1	$
Year 2	$

Expert Solution

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a.			Depreciation
	Year 1	=	$ 6,975
	Year 2	=	$ 9,300

b.			Depreciation
	Year 1	=	$ 14,850
	Year 2	=	$ 16,830


a.	Straight Line method:-

	Depreciation expense	=	(Cost - Residual value) / useful Value
		=	($99000 - $6000) / 10 years
		=	$ 9,300		per year

	Year 1	=	$9300 X 9/12	=	$ 6,975
	Year 2	=			$ 9,300

b.	Double - declining balance method:-

	Double declining rate	=	(100%/ 10years) X 2
		=	20.00%

					Depreciation expense	Remaining Value
	Year 1	=	$99000 X 20% X 9/12	=	$ 14,850	$ 84,150
	Year 2	=	$84150 X 20%	=	$ 16,830	$ 67,320

ekkarill92 answered 2 years ago

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