Depreciation by two methodsA storage tank acquired at the beginning of the fiscal year at a cost of $104,400 has an estimated residual value of $15,000 and an estimated useful life of 10 years. Thisinformation has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.XxOpen spreadsheeta. Determine the amount of annual depreciation by the straight-line method. Round your answer to the nearest dollar.b. Determine the amount of depreciation for the first and second years computed by the double-declining-balance method. Do not round the double-decliningbalance rate. Round your answers to the nearest dollar.Year 1Year 2Depreciation

A tangible item's cost can be spread out over the period of its useful life using the accounting approach of depreciation. Depreciation indicates how much of an asset's worth has been expended. It makes it possible for companies to buy assets over a predetermined period of time and profit from those assets.Answer a. Cost of storage tank = $104,400 Estimated residual value = $15,000 Estimated useful life = 10 years Annual depreciation expense = ( Cost of storage tank-Estimated residual value )/Estimated useful life = (104,400- 15,000)/10 = 89,400/10 = $8,940 Depreciation Year 1 $8,940 Answer b. Double declining depreciation rate = 2 x 1/Useful life = 2 x 1/10 = 20% Depreciation expense for year 1 = Cost of storage tank x Double declining depreciation rate = 104,400 x 20% = $20,880 Book value of storage tank at the end of year 1 = Cost of storage tank- Depreciation expense for year 1 = 104,400- 20,880 = $83,520 Depreciation expense for year 2 = Book value of storage tank at the end of year 1 x Double declining depreciation rate = $83,520 x 20% = $16,704 Depreciation Year 1 $20,880 Year 2 $16,704

Business

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Depreciation by two methods A storage tank acquired at the beginning of the fiscal year at a cost of $104,400 has an estimated residual value of $15,000 and an estimated useful life of 10 years. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. X THUH Open spreadsheet a. Determine the amount of annual depreciation by the straight-line method. Round your answer to the nearest dollar. b. Determine the amount of depreciation for the first and second years computed by the double-declining-balance method. Do not round the double-declining balance rate. Round your answers to the nearest dollar. Year 1 Year 2 Depreciation

Depreciation by two methods A storage tank acquired at the beginning of the fiscal year at a cost of $104,400 has an estimated residual value of $15,000 and an estimated useful life of 10 years. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. X THUH Open spreadsheet a. Determine the amount of annual depreciation by the straight-line method. Round your answer to the nearest dollar. b. Determine the amount of depreciation for the first and second years computed by the double-declining-balance method. Do not round the double-declining balance rate. Round your answers to the nearest dollar. Year 1 Year 2 Depreciation

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Using Excel to prepare depreciation schedules Download an Excel template for this problem online in MyAccountingLab or at http://www.pearsonhighered.corri/Horngren. The Fraser River Corporation has purchased a new piece of factory equipment on January 1, 2018, and wishes to compare three depreciation methods, straight-line, double-declining-balance, and units-of-production. The equipment costs $400,000 and has an estimated useful life of four years, or 8,000 hours. At the end of four years, the equipment is estimated to have a residual value of $20,000. Requirements Use Excel to prepare depreciation schedules for straight-line, double-declining-balance, and units-of-production methods. Use cell references from the Data table. Prepare a second depreciation schedule for double-declining-balance method, using the Excel function DDB. The DDB function cannot be used in the last year of the asset's useful life. At December 31, 2018, Fraser River is trying to determine if it should sell the…
In this exercise, you will create a depreciation schedule for Furniture Resellers as of 12/31/2016 using an Excel table. You will then sort, filter, and analyze the data in the table. These fixed assets, with associated data as of 12/31/2015, were acquired prior to the current year. Fixed Asset Date of Cost Salvage Value Useful Life Accumulated Acquisition (years) Depreciation Machinery 1/1/2007 $8,200 $700 10 $6,750 Garage Equipment 1/1/2009 $11,000 S200 $8,400 Computers 1/1/2013 $4,000 so $2,400 Furniture Resellers also acquired lobby furniture on 1/1/2016. The lobby furniture had a cost of $2,000, an estimated salvage value of $400, and an estimated useful life of eight years. 1. Open a Blank Workbook and save the file in your Chapter 06 folder as: EA6-A2-Depreciation-[YourName] 2. Enter appropriate bank reconciliation headers in the range A1:A2; apply italic formatting. 3. Enter the fixed-asset data in the range A4:F7; for the accumulated depreciation, enter the title but not the…
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