Depreciation - Revised Annual Depreciation 30500...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Schilling Corporation purchased a machine on January 1, 2002, at a total cost of $900,000. The machine has an estimated useful life of 10 years or 1,000,000 units of output and a salvag Straight-Line Depreciation= in$ 2002 2003 75000 75000 Units-of-Activity: $ $ Assume actual activity in terms of units of output was: 2002-60,000 units and 2003-120,000 un Depreciation per unit= Total Cost-Salvage Value/Totall Units Depreciation Expense = Actual Annual Units* Depreciation per Unit 2002 2003 45000 90000 Double-Declining-Balance: 2002 2003 Using the excel funcion $180,000.00 $144,000.00 The double-declining balance method computes depreciation at an accelerated rate. Depreciation is highest in the first period and decreases in successive periods. DDB uses the f cost - salvage(total depreciation from prior periods) * factor / life Depreciation as per the estimated life of 10 years Each year = Total Cost-SalvageValue/10 2001 2002 2003 22500 22500 22500 Book value 227500 205000 182500 Depreciaiton as per the estimated life of only 5 more years
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Revised Annual Depreciation 30500 Double-Declining-Balance: 2002 2003 Using the excel funcion $240,000.00 $144,000.00 B. Melton Company bought machinery on January 1, 2001 at a cost of $250,000. The machinery had an estimated life of 10 years and salvage value of $25,000. In December 2003, Melton estimates that the machinery will have a life of only 5 more years and a $30,000 salvage value. Melton uses straight-line depreciation. Compute the revised annual depreciation. C. Foster Company bought equipment on July 1, 2002 at a total cost of $600,000. The equipment has an estimated useful life of 5 years and salvage value of $120,000. Foster uses the double-declining-balance method of depreciation. Compute depreciation for 2002 and 2003. ge value of $150,000. Total Cost-SalvageValue/10 75000 nits. 0.75 following formula to calculate depreciation for a period:...
View Full Document

This note was uploaded on 04/04/2009 for the course ACC 321 taught by Professor Ahmedmokhtar during the Spring '09 term at Ain Shams University.

Page1 / 2

Depreciation - Revised Annual Depreciation 30500...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online