ACCT 305 Live Lecture Excel Week 3

ACCT 305 Live Lecture Excel Week 3 - DEPRECIATION EXPENSE:...

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Unformatted text preview: DEPRECIATION EXPENSE: SOLVING FOR UNKNOWNS TIP Set up as algebric equation and solve for unknown EXAMPLEInformation given: Cost 80,000 Residual ? Service Life 4 Method SYD Depreciation Year 2 15,000 SYD formula: =N(N+1)/2 =4(4+1)/2 = 10 SYD fraction for Year 2: 3/10 Formula: Depreciation expense Year 2 = (Cost - Residual) x fraction $15,000 = ($80,000 - Salvage) x 3/10 $150,000 = ($80,000 x 3) - (Salvage x 3) $150,000 = $240,000 - 3 Salvage $150,000 + 3Salvage = $240,000 3 Salvage = $90,000 Salvage = $30,000 Check: ($80,000 - $30,000) x 3/10 = $15,000 CHANGE IN DEPRECIATION ESTIMATE FACTS: Purchased asset on 1/1/07 for $9,000,000 Residual value $1,000,000 25-year useful life Straight-line depreciation In 2009 changed the following estimates: Useful life to 20 years Residual value to $500,000 REQUIREDWhat is depreciation expense for 2009?...
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This note was uploaded on 02/05/2012 for the course ACCT 305 taught by Professor Charlie during the Spring '11 term at University of Phoenix.

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ACCT 305 Live Lecture Excel Week 3 - DEPRECIATION EXPENSE:...

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