E11-7 - Asset has been depreciated for 2 1 / 2 years using...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
E11-7 Description Date Purchased Cost Machine A 2/12/09 $159,000 Machine B 8/15/08 79,000 Machine C 7/21/07 88,000 Machine D 10/12/ 09 219,000 (a) Machine A - Testing the methods Straight-line method for 2009 $7,150 [($159,000 - $16,000) ÷ 10] × 1/2 Straight-line method for 2010 14,300 Total Straight Line $21,450 Double-declining balance for 2009 $15,900 ($159,000 × 0.2 × 0.5) Double-declining balance for 2010 28,620 [($159,000 - $15,900) × 0.2] Total Double Declining Balance $44,520 Sum-of-the-years-digits for 2009 $13,000 [($159,000 - $16,000) × 10/55 × 0.5] Sum-of-the-years-digits for 2010 24,700 ($143,000 × 10/55 × 1/2) + ($143,000 × 9/55 × Total Sum-of-the-years- digits $37,700 Method used must be (b) Using SYD, 2011 Depreciation is $22,100 ($143,000 × 9/55 × 1/2) + ($143,000 × 8/55 × 0.5) (c) Machine B – Computation of the cost
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Asset has been depreciated for 2 1 / 2 years using the straight-line method. Annual depreciation is then equal to $29,000 divided by 2 1 / 2 or $11,600. $11,600 times 5 plus the salvage value i Cost is $79,000 [($11,600 5) + $21,000]. (d) (e) Machine C - Using the double declining balance method of depreciation 2007's depreciation is 2008's depreciation is 2009's depreciation is 2010's depreciation is (f) Using DDB, 2011 Depreciation is $3,984 [($88,000 - $55,516) 0.25 = $8,121] restricted to ($88,000 - $55,516 (g) Machine D - Computation of Year Purchased First Half Year using SYD = Second Year using SYD = Thus asset must have been purchased on October 12, 2009 (h) Using SYD, 2011 Depreciation is $35,000 ($150,000 4/15 0.5) + ($150,000 3/15 0.5)...
View Full Document

This note was uploaded on 11/30/2011 for the course ACC 101 taught by Professor B during the Spring '09 term at CUNY Baruch.

Page1 / 2

E11-7 - Asset has been depreciated for 2 1 / 2 years using...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online