The following information is available at June 30, 2018. Please show working. The computer equipment of...

The following information is available at June 30, 2018. Please show working.

The computer equipment of $450,000 was acquired on November 1, 2017 and is being depreciated over 8 years on the double declining method of depreciation, down to a residue of $40,000.

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Expert Solution

Depreciation Table from 01st Nov till 30th June 2018

Year	BV-Year start	Dep %	Dep Expense	Accumulated Dep	BV at year end
2017	$450,000	4.17%	$18,750	$18,750	$431,250
2018	$431,250	12.50%	$53,907	$72657	$377,343

Working:

Annual depreciation rate = 100% / useful life = 100%/8 = 0.125

Double declining depreciation rate = 0.125 *2 = 0.25 or 25%

The computer equipment is purchased on November 2017 thus;

1st year dep = 450,000 * (25% * 2month/12months) = 18,750

2nd year dep upto 30th june: 431,250 * 25% * 6 months/12months = $53,907

Depreciation Table from 01st Nov till 31st Dec'2025

Year	BV-Year start	Dep %	Dep Expense	Accumulated Dep	BV at year end
2017	$450,000	4.17%	$18,750	$18,750	$431,250
2018	$431,250	25.00%	$107,813	$126,563	$323,438
2019	$323,438	25.00%	$80,859	$207,422	$242,578
2020	$242,578	25.00%	$60,645	$268,066	$181,934
2021	$181,934	25.00%	$45,483	$313,550	$136,450
2022	$136,450	25.00%	$34,113	$347,662	$102,338
2023	$102,338	25.00%	$25,584	$373,247	$76,753
2024	$76,753	25.00%	$19,188	$392,435	$57,565
2025	$57,565	20.83%	$11,993	$404,428	$45,572

ekkarill92 answered 1 year ago

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