Question

In: Finance

Complete the following depreciation table using the declining-balance method (twice straight-line rate). Auto: $26,000                      &nbsp

Complete the following depreciation table using the declining-balance method (twice straight-line rate).

Auto: $26,000                         Estimated life: 10 years           Residual value: $600

End of             Cost of         Acc. depr.       Book value      Annual Depr.        Acc. depr.     Book value

Year                asset             B.O.Y             B.O.Y.            Expense                 E.O.Y.          E.O.Y.

1                     

2

3

4

5

6

7

8

9

10

11

Solutions

Expert Solution

Double Declining Balance Method
Cost of Assets $       26,000.00
Salvage Value $             600.00
Estimated Useful life 10 Years
Depreciation Rate= (1/useful life)*200%
Depreciation Rate= 0.1
Double Declining Rate 0.2
Double Declining Rate 20.00%
(A)=(C )*20% (B) (C )
Year Cost Depreciation Rate Depreciation Accumulated Depreciation Book Value
1 $                                                                                                26,000.00 20.00% $                 5,200.00 $                     5,200.00 $                               20,800.00
2 20.00% $                 4,160.00 $                     9,360.00 $                               16,640.00
3 20.00% $                 3,328.00 $                   12,688.00 $                               13,312.00
4 20.00% $                 2,662.40 $                   15,350.40 $                               10,649.60
5 20.00% $                 2,129.92 $                   17,480.32 $                                 8,519.68
6 20.00% $                 1,703.94 $                   19,184.26 $                                 6,815.74
7 20.00% $                 1,363.15 $                   20,547.40 $                                 5,452.60
8 20.00% $                 1,090.52 $                   21,637.92 $                                 4,362.08
9 20.00% $                    872.42 $                   22,510.34 $                                 3,489.66
10 20.00% $                    697.93 $                   23,208.27 $                                 2,791.73

Related Solutions

The method of depreciation was changed from the double-declining-balance method to the straight-line method in fiscal...
The method of depreciation was changed from the double-declining-balance method to the straight-line method in fiscal 2015. A machine was purchased on January 1, 2014 at a cost of $150,000. The machine has an estimated useful life of 10 years and a residual value of $9,000. What should have been booked as depreciation expense in fiscal 2015?
1) A change from straight line depreciation to double declining balance depreciation is an example of...
1) A change from straight line depreciation to double declining balance depreciation is an example of a change in an accounting principle. (answer True or False) 2) When preparing a statement of cash flows (indirect method), a sale of equity securities is an investing activity. (answer True or False)
When we use the method that uses both declining balance and straight line depreciation, we take...
When we use the method that uses both declining balance and straight line depreciation, we take depreciation at the beginning of the depreciable life using _______ and then switchover to _______ for the end of the depreciable life. Declining balance method; straight line method Straight line method; MACRS Straight line method; declining balance method Which method does the IRS use to allow companies to compute their tax liability concerning depreciation? MACRS Straight line depreciation Units of production method Declining balance...
Which depreciation method is most frequently used in businesses today? Straight-line Declining-balance Units-of-activity Double-declining-balance Sargent Corporation...
Which depreciation method is most frequently used in businesses today? Straight-line Declining-balance Units-of-activity Double-declining-balance Sargent Corporation bought equipment on January 1, 2017. The equipment cost $130,000 and had an expected salvage value of $10,000. The life of the equipment was estimated to be 6 years. The total depreciable cost of the equipment is $120,000. $130,000. $140,000. $10,000. Sargent Corporation bought equipment on January 1, 2017. The equipment cost $130,000 and had an expected salvage value of $10,000. The life of...
Pick one “other depreciation method” (other than straight line, sum of the years digits, declining balance,...
Pick one “other depreciation method” (other than straight line, sum of the years digits, declining balance, MACRS and regular tax methods, units or hours of production methods) and explain it.  Any pluses/minuses of this method? 
Different depreciation methodologies: straight line depreciation, declining balance, units of production depreciation methods; should be able...
Different depreciation methodologies: straight line depreciation, declining balance, units of production depreciation methods; should be able to compute the depreciation amount and journal entries using each of those methods.
Hannam Co. decided to change from the declining balance method of depreciation to the straight line method effective 1 January 20X7. The following information was provided:
Hannam Co. decided to change from the declining balance method of depreciation to the straight line method effective 1 January 20X7. The following information was provided: The company has a 31 December year end. The tax rate is 20%. No dividends were declared until 20X7; $20,000 of dividends were declared and paid in December 20X7. Income for 20X7, calculated using the new accounting policy, was $105,000. Required:Assuming that the change in policy was implemented retrospectively, present the retained earnings reconciliation...
Question 1 (1 point) Straight-Line depreciation and Double-Declining-Balance depreciation result in the same Accumulated Depreciation at...
Question 1 (1 point) Straight-Line depreciation and Double-Declining-Balance depreciation result in the same Accumulated Depreciation at the end of the asset's useful life. Question 1 options: True False Question 2 (1 point) If a company makes a journal entry to record a PP&E Impairment, the entry will cause: Question 2 options: Total Assets to Decrease Net Income to Increase Total Assets to Increase Total Liabilities to Increase Question 3 (1 point) We depreciate Land unless it contains natural resources. Question...
how to switch from straight line to double-declining-balance method? give an example.
how to switch from straight line to double-declining-balance method? give an example.
What is the effect of using the accelerated depreciation method (as opposed to the straight-line method)...
What is the effect of using the accelerated depreciation method (as opposed to the straight-line method) for assets on a company’s earnings before taxes (EBT), and thus the tax liability?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT