# ch11 - Name Date Instructor Course Intermediate Accounting...

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Name: Date: Instructor: Course: January 1, Year 1, at a cost of \$518,000 . The asset is expected to have a service life of 12 years and a salvage value of \$50,000 Instructions: Straight-line method depreciation for each of Years 1 through 3 is computed as: Cost: \$518,000 Salvage value: 50,000 Depreciable value: 468,000 Asset life: (Years) 12 Annual straight-line depreciation value: \$39,000 Excel formula for straight-line depreciation is =SLN(Cost,Salvage,Life) Area for Excel calculations as desired. \$39,000.00 Cost: \$518,000 Salvage value: 50,000 Depreciable value: 468,000 Denominator Depreciation expense for year: 1 12 78 \$72,000 Depreciation expense for year: 2 11 78 \$66,000 Depreciation expense for year: 3 10 78 \$60,000 The Excel formula for Sum-of-Years-Digits Depreciation is =SYD(Cost,Salvage,Life,Period) Depreciation expense for year: 1 \$72,000.00 Depreciation expense for year: 2 \$66,000.00 Depreciation expense for year: 3 \$60,000.00 Cost: \$518,000 Salvage value: 50,000 Asset life: (Years) 12 Annual Straight-line Depreciation rate: 8.33% Double-Declining factor: 200% Double-Declining annual rate: 16.67% Year: 1 \$518,000 16.67% \$86,351 \$431,649 2 431,649 16.67% \$71,956 359,693 3 359,693 16.67% \$59,961 299,732 The Excel formula for Accelerated Depreciation is =DDB(Cost,Salvage,Life,Period,Factor) 1 \$86,333 2 \$71,944 3 \$59,954 Note: Minor differences may occur due to rounding and significant digits. Intermediate Accounting , 14 th Edition by Kieso, Weygandt, and Warfield Primer on Using Excel in Accounting by Rex A Schildhouse E11-1 (Depreciation Computations—SL, SYD, DDB) Lansbury Company purchases equipment on (a) Compute the amount of depreciation for each Years 1 through 3 using the straight-line depreciation method. (b) Compute the amount of depreciation for each Years 1 through 3 using the sum-of-years digits depreciation method. The sum of 1 through 12 = 1+2+3+4+5+6+7+8+9+10+11+12 = 1+12 + 2+11 + 3+10 + 4+9 + 5+8 + 6+7 = (1+12) + (2+11) + (3+10) + (4+9) + (5+8) + (6+7) = (13) + (13) + (13) + (13) + (13) + (13) = 13 X (12/2) = 13 X 6 = 78 the sum of the first year and the last year multiplied by one half of the total number of years. Hint: Since "Sum-of-Years-Digits" title contains an "S", use salvage value to compute periodic depreciation expense. Numerator / Year Period Depreciation (c) Compute the amount of depreciation for each Years 1 through 3 using the double-declining balance method. (In performing your calculations, round constant percentage to the nearest one-hundredth of a point and round answers to the nearest dollar.) Hint: Since "Double-Declining Balance Method" title does not contain an "S", do not use salvage value to compute periodic depreciation expense. However, ensure that book value does not violate salvage value. Beginning

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## This note was uploaded on 03/05/2012 for the course BUS 300 taught by Professor Greg during the Fall '11 term at Oglethorpe.

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ch11 - Name Date Instructor Course Intermediate Accounting...

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