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Questions 2-4 are based on the following information: On January 1, 20X1, the Kane Manufacturing Company purchased new equipment costing $200,000.

Questions 2-4 are based on the following information:

On January 1, 20X1, the Kane Manufacturing Company purchased new equipment costing $200,000. The useful life of this Equipment is estimated at ten years, and its salvage value is estimated to be $20,000.


REQUIRED: Using the form provided at the back of this unit, calculate (1) the annual depreciation charge, (2) the accumulated depreciation, and (3) the carrying value of the equipment at the end of each year of the first five years of the asset's life, according to each of the following methods:

a) Straight-line method

b) Declining-balance method

c) Sum-of-the-years'-digits method


Then answer questions 2-4.

2 The carrying value of the equipment at the end of five years, using the straight-line method of depreciation, is

A. $18,000. C. $110,000. B. $90,000. D. $182,000.


3 Using the declining-balance method of depreciation, the accumulated depreciation at the end of four years amounts to

A. $134,464. C. $97,600. B. $118,080. D. $72,000.


4 When using the sum-of-the-years'-digits method of calculating depreciation, the carry- ing value at the end of five years is

A. $137,818.19. C. $88,727.27. B. $130,909.09. D. $69,090.91. 

Top Answer

Answers 2.C. $110,000 3.... View the full answer

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Depreciation Depreciation refers to the loss... View the full answer

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