Judy Beasley Ac501-02 Unit 4 Textbook Assignments

# Judy Beasley Ac501-02 Unit 4 Textbook Assignments - Judy...

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Judy Beasley January 6, 2012 AC501-02 Text-book Assignments Unit 4 Exercises Chapter 10 E10-12 Depreciation Computations -SL, SYD, DDB A. Compute the amount of depreciation for each of the years 1 through 3 using the straight- line depreciation method. \$469,000 - \$40,000 Equals \$35,750 12 B. Compute the amount of depreciation for each of the years 1 through 3 using the sum of the years’ digits method. Sum of the years’ digits = 12 X 13 = 78 2 Year 1 = 12/78 X (\$469,000 - \$40,000) = \$66,000 Year 2 = 11/78 X (\$469,000 - \$40,000) = \$60,500 Year 3 = 10/78 X (\$469,000 - \$40,000) = \$55,000 C. Compute the amount of depreciation for each of the years 1 through 3 using the double declining balance method. Double Declining Balance method depreciation rate = 100% X 2 = 16.67% 12 Year 1 = \$469,000 X 16.67% = \$78,182 depreciation Year 2 = (\$469,000 - \$78,182) X 16.67% = \$65,149 depreciation Year 3 = (\$469,000 - \$78,182 - \$65,149) X 16.67% = \$54,289 depreciation E10-27 Capitalization of Interest A. Avoidable Interest Weig hted Avera ge Accu mulat ed X Inter est Rate Avoid able Inter est

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Expe nditu res \$2,00 0,000 12% \$240, 000 \$1,60 0,000 10.42 % \$166, 720 \$3,60 0,000 \$406, 720 Weighted-average interest rate computation = Principal Interest 10% short term loan \$1,400,000
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## This note was uploaded on 03/11/2012 for the course BUSINESS AC501 taught by Professor Smith during the Spring '12 term at Kaplan University.

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Judy Beasley Ac501-02 Unit 4 Textbook Assignments - Judy...

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