Question

Exercise 11-07

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Wildhorse Industries presents you with the following information.

Complete the table for the year ended December 31, 2022. The company depreciates all assets using the half-year convention. (Round answers to 0 decimal places, e.g. 45,892.)

Description

Date Purchased

Cost

Salvage Value

Life in Years

Depreciation Method

Accumulated Depreciation to 12/31/21

Depreciation for 2022

Machine A

2/12/20

$168,150

$18,880

10

(a)

DDBSLSYD

$39,353

(b)

$

Machine B

8/15/19

(c)

24,780

5

SL

34,220

(d)

Machine C

7/21/18

89,600

23,500

8

DDB

(e)

(f)

Machine D

(g)

10/12/1910/12/2010/12/21

258,420

81,420

5

SYD

82,600

(h)

Answer 1

Description		Date		Cost	Salvage	Life		Depreciation		Accumulated		Depreciation
		Purchased			Value	in Years		Method		Depreciation to		for 2022
Machine A		02-12-2020		$168,150	$18,880	10	(a)	SYD		$39,353	(b)	$23,069.00
Machine B		8/15/19	(c)	$        93,220.00	24,780	5		SL		34,220	(d)	$13,688.00
Machine C		7/21/18		89,600	23,500	8		DDB	(e)	$        56,525.00	(f)	$ 8,269.00
Machine D	(g)	10-12-2020		2,58,420	81,420	5		SYD		82,600	(h)	$41,300.00

Working:

a)
Machine A :
Straight Line Method :
Depreciation for Year 2020	7463.5
Depreciation fro year 2021	29854
Accumulated Depreciation	37317.5
Sum of Year Digit Method
Total Sum of 10 Year =	55
=10+9+8+7+6+5+4+3+2+1
Cost	149270
Year 2020 =	13570
Year 2021	25783
Accumulated Depreciation	39353
b)
Depreciation for year 2022	23069

c)
Machine B :
Total Accumulated Depreciation =	$            34,220.00
Total Period for which depreciation is accumulated
(Half of 2019, 2020,2021)	2.5 years
Depreciation for 5 Year	$            68,440.00
Add: Salvage Value	$            24,780.00
Cost of machine	$            93,220.00
d)
Deprciation for Year 2022
Cost of Machine	$            93,220.00
Salvage Value	$            24,780.00
Depreciable Value	$            68,440.00
Depreciation for year 2022 (68440/5)	$            13,688.00

e)
Machine C
Lfe of machine	8 Years
Depreciation Rate	25%
(100/8)*2
Depreciation for 2018 (89600*25%/2)	$              11,200.00
Depreciation for 2019 (89600-11200)*25%	$              19,600.00
Depreciation for 2020 (89600-11200-19600)*25%	$              14,700.00
Depreciation for 2021 (89600-11200-19600-14700)*25%	$              11,025.00
Total Accumulated Depreciation upto 2021	$              56,525.00
f)
Depreciation for 2022 (89600-11200-19600-14700-11025)*25%	$                8,268.75

g)
Machine D
Sum of Years Digit method
Total sum of Year	15
=5+4+3+2+1
Cost	$    2,58,420.00
Less: Salvage Value	$       81,420.00
Depreciable Value	$    1,77,000.00
Depreciation for Year 1 ((177000*5/15)*50%)	$       29,500.00
Depreciation for Year 2 ((177000*5/15*1/2)+(177000*4/15*1/2))	$       53,100.00
Accumulated Depreciation	$       82,600.00
Hence Machine is purchased 2 years from Year 2021 i.e machine is purchased in Year 2020
h)
Depreciation for Year 2022 ((177000*4/15*1/2)+(177000*3/15*1/2))	$       41,300.00