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Chapter 11 Depreciation Solutions

# Chapter 11 Depreciation Solutions - = 5 5 x 2 = 10 10 x \$...

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Chapter 11 Depreciation Solutions 1. a. Straight Line Depreciation \$ 645,000 - \$ 60,000 12 = \$ 48,750 Depreciation amount for each of the years. b.Sum of the years digits 12 x 13 2 = 78 12/78 x ( 645,000- 60,000) = \$ 90,000 Year 1 11/78 x (645,000 –60,000) = \$ 82,500 Year 2 10/78 x (645,000-60,000) = \$ 75,000 Year 3 c. Double Declining Balance Method 100% 12 x 2 = 16.67% \$ 645,000 x 16.67% = \$ 107,522 Year 1 (\$ 645,000-107,522) x 16.67% = \$ 89,598 Year 2 (\$ 645,000-107,522-\$ 89,598) = \$ 74,662 Year 3 2. a. \$ 345,000- \$ 30,000 20 x 9/12 \$ 11,813 depreciation for 2007 . \$ 345,000- \$ 30,000 20 = \$ 15,750 depreciation for 2008 b. 20 (20+1) 2 = 210 9/12 x 20/210 x (\$ 345,000- \$ 30,000) = \$ 22,500 depreciation for 2007 3/12 x 20/210 x (\$ 345,000- \$30,000) = \$ 7,500 9/12 x 19/210 x (\$ 345,000- \$30,000) = \$ 21,375 \$ 28,875 depreciation for 2008 c. Straight Line Rate = 100% 20

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Unformatted text preview: = 5% 5% x 2 = 10% 10% x \$ 345,000 x 9/12 = \$ 25,875 for first year depreciation 10% x \$ 345,000-\$ 25,875= \$ 31,913 for 2008. 1 3. Cost \$ 105,000 Accumulated Depreciation at 1/1/07 ( 45,000) (a) Book Value at 1/1/07 60,000 Additional Expenditure Capitalized 25,000 Revised Book Value 85,000 Current estimate of salvage value (10,000) Remaining depreciable cost @ 1/1/07 75,000 Remaining years of useful life 15 (b) Depreciation expense for 2007 5,000 (a) Cost \$105,000 Original estimate of salvage value ( 15,000) Original depreciable cost \$ 90,000 Original service life in years 20 Original depreciation per year \$ 4,500 Number of years used 10 Accumulated depreciation @ 1/1/07 \$ 45,000 (b) Original estimate of life in years 20 Number of years used (10) Additional years 5 Remaining years of useful life @ 1/1/07 15 2...
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