dep-example1[1] - of year Depreciation rate Depreciation...

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Depreciation Example 1 Cost 110,000 $ Salvage value 20,000 $ Useful life 5 Purchase date January 1, 2006 Straight line depreciation Year Depreciation 2006 18,000 $ =($110,000 - $20,000) x 1/5 2007 18,000 $ =($110,000 - $20,000) x 1/5 2008 18,000 $ =($110,000 - $20,000) x 1/5 2009 18,000 $ =($110,000 - $20,000) x 1/5 2010 18,000 $ =($110,000 - $20,000) x 1/5 Total 90,000 $ Double declining balance 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 110,000 $ 40% 44,000 $ 44,000 $ 66,000 $ 2007 66,000 $ 40% 26,400 $ 70,400 $ 39,600 $ 2008 39,600 $ 40% 15,840 $ 86,240 $ 23,760 $ 2009 23,760 $ 40% 3,760 $ (*1) 90,000 $ 20,000 $ 2010 20,000 $ 40% - $ 90,000 $ 20,000 $ Total 90,000 $ (*1) Depreciation stops when accumulated depreciation reaches depreciation base. Depreciation base = cost - salvage value = $110,000 - $20,000 = $90,000 150% declining balance depreciation Depreciation rate 30% =1/5 x 150% Year Book value at the beginning
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Unformatted text preview: of year Depreciation rate Depreciation expense Accumulated depreciation Book value at year-end 2006 110,000 $ 30% 33,000 $ 33,000 $ 77,000 $ 2007 77,000 $ 30% 23,100 $ 56,100 $ 53,900 $ 2008 53,900 $ 30% 16,170 $ 72,270 $ 37,730 $ 2009 37,730 $ 30% 11,319 $ 83,589 $ 26,411 $ 2010 26,411 $ 30% 6,411 $ (*2) 90,000 $ 20,000 $ Total 90,000 $ (*2) Depreciation stops when accumulated depreciation reaches depreciation base. Depreciation base = cost - salvage value = $110,000 - $20,000 = $90,000 Sum-of-the-years'-digits depreciation Sum of the years' digits 15 =1+2+3+4+5 Year Years' digits Depreciation 2006 5 30,000 $ =($110,000 - $20,000) x 5/15 2007 4 24,000 $ =($110,000 - $20,000) x 4/15 2008 3 18,000 $ =($110,000 - $20,000) x 3/15 2009 2 12,000 $ =($110,000 - $20,000) x 2/15 2010 1 6,000 $ =($110,000 - $20,000) x 1/15 Total 15 90,000 $ Copyright © 1999-2009 by AccountingStudy.com. TM Page 1 of 1...
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