Metlock Company purchased a new plant asset on April 1, 2020, at a cost of $741,000. It was estimated to have a service life of 20 years and a salvage value of $56,400. Metlock’ accounting period is the calendar year. (a) Your Answer Correct Answer Partially correct answer icon Your answer is partially correct. Compute the depreciation for this asset for 2020 and 2021 using the sum-of-the-years'-digits method. (Round answers to 0 decimal places, e.g. 45,892.) Depreciation for 2020 $enter a dollar amount Depreciation for 2021 $enter a dollar amount eTextbook and Media Assistance Used Solution Assistance Used 20 (20 + 1) = 210 2 9/12 x 20/210 x ($741,000 – $56,400) = $48,900 for 2020 3/12 x 20/210 x ($741,000 – $56,400) = $16,300 + 9/12 x 19/210 x ($741,000 – $56,400) = 46,455 $62,755 for 2021 Attempts: 9 of 9 used (b) Compute the depreciation for this asset for 2020 and 2021 using the double-declining-balance method. (Round answers to 0 decimal places, e.g. 45,892.) Depreciation for 2020 $enter a dollar amount Depreciation for 2021 $enter a dollar amount
Metlock Company purchased a new plant asset on April 1, 2020, at a cost of $741,000. It was estimated to have a service life of 20 years and a salvage value of $56,400. Metlock’ accounting period is the calendar year. (a) Your Answer Correct Answer Partially correct answer icon Your answer is partially correct. Compute the depreciation for this asset for 2020 and 2021 using the sum-of-the-years'-digits method. (Round answers to 0 decimal places, e.g. 45,892.) Depreciation for 2020 $enter a dollar amount Depreciation for 2021 $enter a dollar amount eTextbook and Media Assistance Used Solution Assistance Used 20 (20 + 1) = 210 2 9/12 x 20/210 x ($741,000 – $56,400) = $48,900 for 2020 3/12 x 20/210 x ($741,000 – $56,400) = $16,300 + 9/12 x 19/210 x ($741,000 – $56,400) = 46,455 $62,755 for 2021 Attempts: 9 of 9 used (b) Compute the depreciation for this asset for 2020 and 2021 using the double-declining-balance method. (Round answers to 0 decimal places, e.g. 45,892.) Depreciation for 2020 $enter a dollar amount Depreciation for 2021 $enter a dollar amount
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
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.
Topic Video
Question
Metlock Company purchased a new plant asset on April 1, 2020, at a cost of $741,000. It was estimated to have a service life of 20 years and a salvage value of $56,400. Metlock’ accounting period is the calendar year.
(a)
- Your Answer
- Correct Answer
Partially correct answer icon
Your answer is partially correct.
Compute the depreciation for this asset for 2020 and 2021 using the sum-of-the-years'-digits method. (Round answers to 0 decimal places, e.g. 45,892.)
| Depreciation for 2020 |
$enter a dollar amount
|
|
|---|---|---|
| Depreciation for 2021 |
$enter a dollar amount
|
eTextbook and Media
Assistance Used
Solution
Assistance Used
| 20 (20 + 1) | = | 210 |
| 2 |
9/12 x 20/210 x ($741,000 – $56,400) = $48,900 for 2020
| 3/12 x 20/210 x ($741,000 – $56,400) | = | $16,300 | |
| + 9/12 x 19/210 x ($741,000 – $56,400) | = | 46,455 | |
| $62,755 | for 2021 |
Attempts: 9 of 9 used
(b)
Compute the depreciation for this asset for 2020 and 2021 using the double-declining-balance method. (Round answers to 0 decimal places, e.g. 45,892.)
| Depreciation for 2020 |
$enter a dollar amount
|
|
|---|---|---|
| Depreciation for 2021 |
$enter a dollar amount
|
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