Complete the form below by determining the depreciation expense
and year-end book values for 2020 and 2021 using the
1. |
|
sum-of-the-years'-digits method. |
2. |
|
double-declining balance method. |
|
|
2020 |
|
2021 |
|
Sum-of-the-Years'-Digits Method |
|
|
|
|
|
Equipment |
|
$2,880,000 |
|
$2,880,000 |
|
Less: Accumulated Depreciation |
|
$460000 |
|
$1288000 |
|
Year-End Book Value |
|
2420000 |
|
1592000 |
|
Depreciation Expense for the Year |
|
2880000-120000*5/15*6/12 = 460000 |
|
460000+368000 = 828000 |
|
Double-Declining Balance Method |
|
|
|
|
|
Equipment |
|
$2,880,000 |
|
$2,880,000 |
|
Less: Accumulated Depreciation |
|
$576000 |
|
$1497600 |
|
Year-End Book Value |
|
2304000 |
|
1382400 |
|
Depreciation Expense for the Year |
|
2880000*40%*6/12 = 576000 |
|
576000+345600= 921600 |
|
|
|
|
|
2) Accumulated Depreciation = (2880000-160000/5*1.5) =
816000
2022 Depreciation = (2880000-160000-816000)/2 = 952000
3) 2022 Depreciable base = (2880000-816000-160000) = 1904000