4-14-11 Solution

4-14-11 Solution - EXERCISE 22-6 (a) Depreciation to date...

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Unformatted text preview: EXERCISE 22-6 (a) Depreciation to date on equipment Sum-of-the-years’-digits depreciation 2007 (5/15 X $450,000) $150,000 2008 (4/15 X $450,000) 120,000 2009 (3/15 X $450,000) 90,000 $360,000 Cost of equipment..................................................... $465,000 Depreciation to date................................................... 360,000 Book value (December 31, 2009).............................. $105,000 Book value – Salvage value = Depreciable cost $105,000 – $15,000 = $90,000 Depreciation for 2010: $90,000/2 = $45,000 Depreciation Expense........................................................................ 45,000 Accumulated Depreciation—Equipment................................. 45,000 (b) Depreciation to date on building $780,000/30 years = $26,000 per year $26,000 X 3 = $78,000 depreciation to date Cost of building......................................................... $780,000 Depreciation to date................................................... 78,000 Book value (December 31, 2009).............................. $702,000 Depreciation for 2010: $702,000/(40 – 3) = $18,973 Depreciation Expense........................................................................Depreciation Expense....
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This note was uploaded on 03/03/2012 for the course MGMT 351 taught by Professor Staff during the Spring '08 term at Purdue.

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4-14-11 Solution - EXERCISE 22-6 (a) Depreciation to date...

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