In: Accounting
Acquisition cost 20,000
Estimated useful life 10 years
Estimated total unit of production 12,000
Estimated salvage value 2,000
Actual units produced in year 1 1,100
Actual units produced in year 2 1,500
A |
Cost |
$ 20,000.00 |
B |
Residual Value |
$ 2,000.00 |
C=A - B |
Depreciable base |
$ 18,000.00 |
D |
Usage |
12,000 |
E = C/D |
Depreciation per unit |
$ 1.50 |
Depreciation Expense for Year 2 = 1500 units x $ 1.50 = $ 2,250 Answer
A |
Cost |
$ 20,000.00 |
B |
Residual Value |
$ 2,000.00 |
C=A - B |
Depreciable base |
$ 18,000.00 |
D |
Life [in years] |
10 |
E=C/D |
Annual SLM depreciation |
$ 1,800.00 |
F=E/C |
SLM Rate |
10.00% |
G=F x 2 |
DDB Rate |
20.00% |
Year |
Beginning Book Value |
Depreciation rate |
Depreciation expense |
Ending Book Value |
Accumulated Depreciation |
1 |
$ 20,000.00 |
20.00% |
$ 4,000.00 |
$ 16,000.00 |
$ 4,000.00 |
2 |
$ 16,000.00 |
20.00% |
$ 3,200.00 |
$ 12,800.00 |
$ 7,200.00 |
--Depreciation expense for Year 2 = $ 3,200 Answer
Book value after its fully depreciated = $ 2,000 (which will be equal to the Salvage value)