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

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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

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

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