Answered

Discover the answers to your questions at Westonci.ca, where experts share their knowledge and insights with you. Get precise and detailed answers to your questions from a knowledgeable community of experts on our Q&A platform. Get quick and reliable solutions to your questions from a community of experienced experts 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 :

anthougo

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 visiting our platform. We hope you found the answers you were looking for. Come back anytime you need more information. Thanks for using our service. We're always here to provide accurate and up-to-date answers to all your queries. Westonci.ca is committed to providing accurate answers. Come back soon for more trustworthy information.