At Westonci.ca, we connect you with the best answers from a community of experienced and knowledgeable individuals. Join our platform to connect with experts ready to provide accurate answers to your questions in various fields. Get immediate and reliable solutions to your questions from a community of experienced professionals on our platform.

Computing Depreciation Expense. Equipment costing $680,000, with an expected scrap value of $60,000 and an estimated useful life of 5 years, was purchased on January 1, 2012. Calculate the depreciation expense for years 2012 to 2016 using: (a) the straight-line method and (b) the double-declining-balance method. Round to the nearest whole number.

Sagot :

The depreciation expenses for the five years using the two depreciation methods are as follows:

Year                  Depreciation Expenses

                 Straight-Line        Double-Declining

                    Method                     Method

2012            $124,000                 $272,000

2013              124,000                    163,200

2014              124,000                      97,920

2015              124,000                      58,752

2016              124,000                       28,128

Data and Calculations:

Cost of Equipment = $680,000

Estimated Scrap value = $60,000

Estimated useful life = 5 years

Equipment purchase date = January 1, 2012

Depreciable amount = $620,000 ($680,000 - $60,000)

Straight-line Depreciation method:

Depreciation expense for each of the five years = $124,000 ($620,000/5)

Double-declining-balance method:

Depreciation rate per year = 40% (100/5 x 2)

Year       Depreciation                               Reduced

                Expense                                     Balance

2012       $272,000 ($680,000 x 40%)   $408,000 ($680,000 - $272,000)

2013         163,200 ($408,000 x 40%)      244,800 ($408,000 - $163,200)

2014           97,920 ($24,800 x 40%)         146,880 ($244,800 - $97,920)

2015          58,752 ($146,880 x 40%)           88,128 ($146,880 - $58,752)

2016          28,128 ($88,128 - $60,000)     60,000 ($88,128 - $28,128)

Learn more: https://brainly.com/question/19091134

Thank you for choosing our service. We're dedicated to providing the best answers for all your questions. Visit us again. Thank you for visiting. Our goal is to provide the most accurate answers for all your informational needs. Come back soon. Discover more at Westonci.ca. Return for the latest expert answers and updates on various topics.