Mgmt_200_Spring_2008_solutions_3-17-08(3,19)

Mgmt_200_Spring_2008_solutions_3-17-08(3,19) - Management...

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Management 200 – Introductory Financial Accounting– Spring 2008 Krannert School of Management - Purdue University Solutions to class assignment for March 17, 2008 E8–7. 1. a. Straight-line: Year Computation Depreciation Expense Accumulated Depreciation Net Book Value At acquisition $7,600 1 ($7,600 - $800) x 1/4 $1,700 $1,700 5,900 2 ($7,600 - $800) x 1/4 1,700 3,400 4,200 3 ($7,600 - $800) x 1/4 1,700 5,100 2,500 4 ($7,600 - $800) x 1/4 1,700 6,800 800 b. Units-of-production: ($7,600 – $800) ÷ 10,000 = $0.68 per hour of output Year Computation Depreciation Expense Accumulated Depreciation Net Book Value At acquisition $7,600 1 $0.68 x 3,500 hours $2,380 $2,380 5,220 2 $0.68 x 3,200 hours 2,176 4,556 3,044 3 $0.68 x 2,200 hours 1,496 6,052 1,548 4 $0.68 x 1,100 hours 748 6,800 800 c. Double-declining-balance: Year Computation Depreciation Expense Accumulated Depreciation Net Book Value At acquisition $7,600 1 ($7,600 - $0) x 2/4 $3,800 $3,800 3,800 2 ($7,600 - $3,800) x 2/4 1,900
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Mgmt_200_Spring_2008_solutions_3-17-08(3,19) - Management...

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