Massiel Reyes

BUS271
HW CH:17

CH:17
17-3
a. Straight-Line
Depreciation per year = cost - salvage value / Useful Life
Depreciation per year = 6,500 - 500/ 5
Depreciation per year = $1,200
b. Double-declining-Balance:

Years
1
2
3
4
5

Beginning
value
DDB computation
DDB Rate
$
6,500
0.40 $6,500 x 0.40 = $2,600
$
3,900
0.40 $3,900 x .40 = $1,560
$
2,340
0.40 $2,340 x .40 = $ 936
$
1,404
0.40 $1,404 x .40 = $561.60
$ 842.40
$842.40 - 500 = $42.40
Total depreciation = $5,700

Ending
book Value
$
3,900
$
2,340
$
1,404
$ 842.40
$
500

c. Units-of-production:
Depreciation per unit: Cost - salvage value / estimated life in units
Depreciation per unit: 6,500 - 500 / 8,400 = .71
Year 1: depreciation for 1,050 hours = 1,050 x .71 = $745.50
Year 2: depreciation for 500 hours = 500 x .71 = $355

17-5
28-Apr
Depreciation Expense
Accumulated Depreciation
28-Apr Accumulated Depreciation
Office equipment
Loss on disposal
Office Equipment
Discarded the equipment

$7,300
$7,300
$7,300
0
$7,300

17-1A

a.
Straight-Line Method
Purchase
Price
$28,000

Year

Annual Depreciation

$28,000 - $5,000 = $23,00

$23,000 - $5,000 = $18,000

$18,000 - $5,000 = $13,000

$13,000 - $5,000 = $8,000

$8000 - 5,000 = $3,000

$

25,000

b.
Double-Declining-Balance Method

Purchase Price:
Depreciation Rate:

Year

Annual Depreciation

$28,000 x .40 = $11,200

$16,800 x .40 = $6,700

$10,100 x .40 =

$6.060 x .4 = $2,424

$3,636 - $3000 = $636

$

c.

25,000

Units-of-Production Method

Purchase Price:
Depreciable Cost:
Useful Life (miles):
Depreciation per Unit:

Year

Units Used

10000 x .25 =

20000 x .25=

40000 x .25 =

18000 x .25 =

12000 x .25 =

e Method
Salvage

Depreciable

Value

Cost

$3,000

$5,000

Accumulated
Depreciation

Book Value
at End of
Year

5,000

23,000

10,000

18,000

15,000

13,000

20,000

8,000

25,000

3,000

Balance Method

$28,000
40%

Accumulated
Depreciation

Book Value
at End of
Year

11,200

16,800

6,700

10,100

4,040

6,060

2,424

3,636

636

3,000

nits-of-Production Method

$28,000

iable Cost:
100,000
$0.25

Annual
Depreciation
$

2,500

Accumulated
Depreciation
$

Book Value
at End of
Year

2,500

25,500

5,000

7,500

20,500

10,000

17,500

10,500

4,500

22,000

6,000

3,000

25,000

3,000

25,000