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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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