ch11 - SOLUTIONS TO B EXERCISES E11-1B(15–20 minutes(a...

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Unformatted text preview: SOLUTIONS TO B EXERCISES E11-1B (15–20 minutes) (a) Straight-line method depreciation for each of Years 1 through 3 = $500,000 – $50,000 = $45,000 10 (b) Sum-of-the-years’-digits = 10 X 11 = 55 2 10/55 X ($500,000 – $50,000) = $81,818 depreciation, Year 1 9/55 X ($500,000 – $50,000) = $73,636 depreciation, Year 2 8/55 X ($500,000 – $50,000) = $65,455 depreciation, Year 3 (c) Double-declining balance method depreciation rate = 100% X 2 = 20.00% 10 $500,000 X 20.00% = $100,000 depreciation, Year 1 ($500,000 – $100,000) X 20.00% = $ 80,000 depreciation, Year 2 ($500,000 – $100,000 – $80,000) X 20.00% = $ 64,000 depreciation, Year 3 11-1 E11-2B (15–20 minutes) (a) 20 (20 + 1) = 210 2 3/4 X 20/210 X ($355,500 – $30,000) = $23,250 for 2007 1/4 X 20/210 X ($355,500 – $30,000) = $ 7,750.00 + 3/4 X 19/210 X ($355,500 – $30,000) = 22,087.50 $29,837.50 for 2008 (b) 100% = 5%; 5% X 2 = 10% 20 3/4 X 10% X $355,500 = $26,662.50 for 2007 10% X ($355,500 – $26,662.50) = $32,883.75 for 2008 11-2 E11-3B (15–25 minutes) (a) $345,000 – $45,000 = $300,000; $300,000 ÷ 10 yrs. = $30,000 (b) $300,000 ÷ 120,000 units = $2.50; 25,000 units X $2.50 = $62,500 (c) $300,000 ÷ 12,500 hours = $24.00 per hr.; 2,000 hrs. X $24.00 = $48,000 (d) 10 + 9 + 8 + 7 + 6 + 5 + 4 + 3 + 2 + 1 = 55 or n(n + 1) = 10(11) = 55 2 2 10 X $300,000 X 1/3 = $18,182 55 9 X $300,000 X 2/3 = 32,727 55 Total for 2008 $50,909 (e) $345,000 X 20% X 1/3 = $23,000 [$345,000 – ($345,000 X 20%)] X 20% X 2/3 = 36,800 Total for 2008 $59,800 [May also be computed as 20% of ($345,000 – 2/3 of 20% of $345,000).] 11-3 E11-4B (20–25 minutes) (a) ($235,800 – $25,800) = $21,000/yr. = $21,000 X 5/12 = $8,750 10 2007 depreciation—straight-line = $8,750 (b) ($235,800 – $25,800) = $5.00/hr. 42,000 2007 depreciation—machine usage = 800 X $5.00 = $4,000 (c) Machine Allocated to Year Total 2007 2008 1 10/55 X $210,000 = $38,181.82 $15,909* $22,273** 2 9/55 X $210,000 = $34,363.64 14,318 *** $15,909 $36,591 * $38,181.82 X 5/12 = $15,909.09 ** $38,181.82 X 7/12 = $22,272.73 *** $34,363.64 X 5/12 = $14,318.18 2008 Depreciation—sum-of-the-years’-digits = $36,591 (d) 2007 40% X ($235,800) X 5/12 = $39,300 2008 40% X ($235,800 – $39,300) = $78,600 OR 1 st full year (40% X $235,800) = $94,320 2 nd full year [40% X ($235,800 – $94,320)] = $56,592 2007 depreciation = 5/12 X $94,320 = $39,300 2008 depreciation = 7/12 X $94,320 = $55,020 5/12 X $56,592 = 23,580 $78,600 11-4 E11-5B (20–30 minutes) (a) 2006 Straight-line $250,000 – $50,000 = $25,000/year 8 3 months—depreciation $6,250 = ($25,000 X 3/12) (b) 2006 Output $250,000 – $50,000 = $10.00/output unit 20,000 1,500 units X $10.00 = $15,000 (c) 2006 Working hours $250,000 – $50,000 = $20.00/hour 10,000 900 hours X $20.00 = $18,000 (d) 8 + 7 + 6 + 5 + 4 + 3 + 2 + 1 = 36 or n (n + 1) = 8(9) = 36 2 2 Allocated to Sum-of-the-years’-digits Total 2006 2007 2008 Year 1 8/36 X $200,000 = $44,444 $11,111 $33,333 2 7/36 X $200,000 = $38,889...
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This note was uploaded on 05/10/2010 for the course ACC 440 BSB1658 taught by Professor Warwick during the Spring '09 term at University of Phoenix.

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ch11 - SOLUTIONS TO B EXERCISES E11-1B(15–20 minutes(a...

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