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P10-3A Individual

# P10-3A Individual - (160,000-10,000/125,000 Unites= 1.20...

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Sheet1 Page 1 P10-3A A-1 Purchase Price 38,000.00 Sales tax 1,700.00 Shipping Costs 150.00 Insurance during shipping 80.00 Installation and testing 70.00 Testing cost of machine 40,000.00 Machine 4,000.00 Cash 40,000.00 A-2 Recorded cost 40,000.00 Less: Salvage value 5,000.00 Depreciable cost 35,000.00 years of useful life 5 Annual depreciation (35,000.00/5years = 7,000.00) 7,000.00 Depreciation expense 7,000.00 7,000.00 B-1 Recorded cost 160,000.00 Less: Salvage value 10,000.00 Depreciable cost 150,000.00 years of useful life 4 Annual depreciation (150,000.00/4years = 37,500.00) 37,500.00 B-2 Book value at beginning of year Accumulated Depreciation 160,000.00 50% 80,000.00 80,000.00 80,000.00 50% 40,000.00 120,000.00 40,000.00 50% 20,000.00 140,000.00 20,000.00 50% 10,000.00 150,000.00 B-3 Depreciation cost per unit:

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Unformatted text preview: (160,000-10,000)/125,000 Unites= 1.20 per unit Annual depreciation expense 2008 45,000 x 1.20 = 54,000.00 2009 35,000 x 1.20 = 42,000.00 2010 25,000 x 1.20 = 30,000.00 2011 20,000 x 1.20 = 24,000.00 Accumulated Depreciation 100% / 4 years of useful life = 25% x 2= 50% Double Declining Rate Annual Depreciation Expense Sheet1 Page 2 C For the First year the decliningbalance method shows the highest depreciation amount and the Straight line shows the lowest. For the fourth year, the Straight line method shows the highest depreciation amount and the declining balance shows the loest For the over all four periods, we will come up with the same results when using any of the three methods....
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