3. A distillation column is designed, purchased and installed for a cost of $2.6 million. The equipment has a depreciable life of ten (10) years with a final salvage value of $100,000 in year 10. For this equipment determine a. The book value and depreciation allowance for each year using straight-line (SLN) depreciation. b. Book values and depreciation allowances for each year using double-declining (DDB) depreciation. ...
3. A distillation column is designed, purchased and installed for a cost of $2.6 million. The equipment has a depreciable life of ten (10) years with a final salvage value of $100,000 in year 10. For this equipment determine a. The book value and depreciation allowance for each year using straight-line (SLN) depreciation. b. Book values and depreciation allowances for each year using double-declining (DDB) depreciation. ...
Introduction to Chemical Engineering Thermodynamics
8th Edition
ISBN:9781259696527
Author:J.M. Smith Termodinamica en ingenieria quimica, Hendrick C Van Ness, Michael Abbott, Mark Swihart
Publisher:J.M. Smith Termodinamica en ingenieria quimica, Hendrick C Van Ness, Michael Abbott, Mark Swihart
Chapter1: Introduction
Section: Chapter Questions
Problem 1.1P
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Transcribed Image Text:**Depreciation Methods and Calculations for a Distillation Column**
**Scenario:**
A distillation column is designed, purchased, and installed for a cost of $2.6 million. The equipment has a depreciable life of ten (10) years with a final salvage value of $100,000 in year 10. For this equipment, the following determinations are required:
**Calculations:**
a. **Straight-Line (SLN) Depreciation:**
- Calculate the book value and depreciation allowance for each year using the straight-line method. This involves dividing the depreciable amount (initial cost minus salvage value) evenly over the useful life of the asset.
b. **Double-Declining Balance (DDB) Depreciation:**
- Determine the book values and depreciation allowances for each year using the double-declining balance method. This accelerates depreciation by applying a constant double rate to the declining book value each year.
> **Note:** For accurate calculations and thorough examples, familiarity with these methods and formulas in accounting practices is recommended.
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