dep-example2[1]

# dep-example2[1] - Depreciation rate Depreciation expense...

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Depreciation Example 2 Cost 220,000 \$ Salvage value 38,000 \$ Useful life 5 Purchase date January 1, 2006 Straight line depreciation Year Depreciation 2006 36,400 \$ =(\$220,000 - \$38,000) x 1/5 2007 36,400 \$ =(\$220,000 - \$38,000) x 1/5 2008 36,400 \$ =(\$220,000 - \$38,000) x 1/5 2009 36,400 \$ =(\$220,000 - \$38,000) x 1/5 2010 36,400 \$ =(\$220,000 - \$38,000) x 1/5 Total 182,000 \$ Double declining depreciation Depreciation rate 40% =1/5 x 200% Year Book value at the beginning of year Depreciation rate Depreciation expense Accumulated depreciation Book value at year-end 2006 220,000 \$ 40% 88,000 \$ 88,000 \$ 132,000 \$ 2007 132,000 \$ 40% 52,800 \$ 140,800 \$ 79,200 \$ 2008 79,200 \$ 40% 31,680 \$ 172,480 \$ 47,520 \$ 2009 47,520 \$ 40% 9,520 \$ (*1) 182,000 \$ 38,000 \$ 2010 38,000 \$ 40% - \$ 182,000 \$ 38,000 \$ Total 182,000 \$ (*1) Depreciation stops when accumulated depreciation reaches depreciation base. Depreciation base = cost - salvage value = \$220,000 - \$38,000 = \$182,000 150% declining depreciation Depreciation rate 30% =1/5 x 150% Year Book value at the beginning of year
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Unformatted text preview: Depreciation rate Depreciation expense Accumulated depreciation Book value at year-end 2006 220,000 \$ 30% 66,000 \$ 66,000 \$ 154,000 \$ 2007 154,000 \$ 30% 46,200 \$ 112,200 \$ 107,800 \$ 2008 107,800 \$ 30% 32,340 \$ 144,540 \$ 75,460 \$ 2009 75,460 \$ 30% 22,638 \$ 167,178 \$ 52,822 \$ 2010 52,822 \$ 30% 14,822 \$ (*2) 182,000 \$ 38,000 \$ Total 182,000 \$ (*2) Depreciation stops when accumulated depreciation reaches depreciation base. Depreciation base = cost - salvage value = \$220,000 - \$38,000 = \$182,000 Sum-of-the-years'-digits depreciation Sum of the years' digits 15 =1+2+3+4+5 Year Years' digits Depreciation 2006 5 60,667 \$ =(\$220,000 - \$38,000) x 5/15 2007 4 48,533 \$ =(\$220,000 - \$38,000) x 4/15 2008 3 36,400 \$ =(\$220,000 - \$38,000) x 3/15 2009 2 24,267 \$ =(\$220,000 - \$38,000) x 2/15 2010 1 12,133 \$ =(\$220,000 - \$38,000) x 1/15 Total 15 182,000 \$ Copyright © 1999-2009 by AccountingStudy.com. TM Page 1 of 1...
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## This note was uploaded on 06/22/2009 for the course ACCOUNTING 3 taught by Professor Kaas during the Spring '09 term at CUNY Brooklyn.

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