Question

Could you do this in excel

Young Company purchased a computer that cost $60,000 on March 31, Year 1. This computer had an estimated useful life of six years and a salvage value of $6,000. Young Company determines depreciation expense based upon the sum‐of‐years’ digits method (round all numbers to the nearest whole number and all percentages to the nearest 2 decimal places).

On December 31, Year 2, the old computer is exchanged for a similar computer with a fair market value of $40,000. Assume this transaction lacks commercial substance. Determine the recognized gain/loss on the trade (if any) assuming each of the following independent scenarios: a. Young Company paid $10,000 on the exchange b. Young Company paid $2,000 on the exchange c. Young Company received $3,000 on the exchange

Answer 1

Depreciation Schedule
Year	Book Value Year Start	Total Cost Depreciable	Depreciation Percent	Depreciation Expense	Accumulated Depreciation	Book Value Year End
1	$60,000	$54,000.00	21.43%	$11,571	$11,571	$48,429
2	$48,429	$54,000.00	25.00%	$13,500	$25,071	$34,929
3	$34,929	$54,000.00	20.24%	$10,929	$36,000	$24,000
4	$24,000	$54,000.00	15.48%	$8,357	$44,357	$15,643
5	$15,643	$54,000.00	10.71%	$5,786	$50,143	$9,857
6	$9,857	$54,000.00	5.95%	$3,214	$53,357	$6,643
7	$6,643	$54,000.00	1.19%	$643	$54,000	$6,000

	a	b	c
Book Value	$34,929	$34,929	$34,929
Cash Paid	$10,000	$2,000	($3,000)
Total Value	$44,929	$36,929	$31,929
FMV	$40,000	$40,000	$40,000
Recognized gain (loss)	($4,929)	$3,071	$8,071

Year	Depreciation %
1	6/21*9/12	21.43%
2	6/21*3/12+5/21*9/12	25.00%
3	5/21*3/12+4/21*9/12	20.24%
4	4/21*3/12+3/21*9/12	15.48%
5	3/21*3/12+2/21*9/12	10.71%
6	2/21*3/12+1/21*9/12	5.95%
7	1/21*3/12	1.19%
Sum of Digits (6*(6+1)/2)		21