Knife Edge Company purchased tool sharpening equipment on July 1, 20Y5, for $16,200. The equipment was expected to have a useful life of three years and a residual value of $900. Instructions: a. Determine the amount of depreciation expense for the years ended December 31, 20Y5, 20Y6, 20Y7 and 20Y8 by the straight-line method. Depreciation Expense 20Y5 $fill in the blank 1 20Y6 $fill in the blank 2 20Y7 $fill in the blank 3 20Y8 $fill in the blank 4 b. Determine the amount of depreciation expense for the years ended December 31, 20Y5, 20Y6, 20Y7 and 20Y8 by the double-declining-balance method. Round the double-declining-balance depreciation rate to six decimal places and round your final answers to the nearest whole dollar. Depreciation Expense 20Y5 $fill in the blank 5 20Y6 $fill in the blank 6 20Y7 $fill in the blank 7 20Y8 $fill in the blank 8
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Knife Edge Company purchased tool sharpening equipment on July 1, 20Y5, for $16,200. The equipment was expected to have a useful life of three years and a residual value of $900.
Instructions:
a. Determine the amount of
| Depreciation Expense | |
| 20Y5 | $fill in the blank 1 |
| 20Y6 | $fill in the blank 2 |
| 20Y7 | $fill in the blank 3 |
| 20Y8 | $fill in the blank 4 |
b. Determine the amount of depreciation expense for the years ended December 31, 20Y5, 20Y6, 20Y7 and 20Y8 by the double-declining-balance method. Round the double-declining-balance depreciation rate to six decimal places and round your final answers to the nearest whole dollar.
| Depreciation Expense | |
| 20Y5 | $fill in the blank 5 |
| 20Y6 | $fill in the blank 6 |
| 20Y7 | $fill in the blank 7 |
| 20Y8 |
$fill in the blank 8
|
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