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