On April 22, 2023, Pharoah Enterprises purchased equipment for $134,860. The company expects to use the equipment for 11,800 working hours during its four-year life and that it will have a residu value of $14,500. Pharoah has a December 31 year end and pro-rates depreciation to the nearest month. The actual machine usage was: 2,000 hours in 2023; 2,500 hours in 2024; 3,900 hours in 202 2,500 hours in 2026; and 1,100 hours in 2027. (a2) Prepare a depreciation schedule for the life of the asset under the double diminishing-balance method. (Round partial-period depreciation rate to 4 decimal palces, e.g. 15.2563% and other answers to O decimal places, e.g. 5,276.) Year 2023 2024 2025 2026 $ Carrying Amount Beginning of Year 134,860 Depr. Rate 50 % 50 % 50 % 50 % $ Depr. Expense Accum. Depr. End of Year Carrying Amount
On April 22, 2023, Pharoah Enterprises purchased equipment for $134,860. The company expects to use the equipment for 11,800 working hours during its four-year life and that it will have a residu value of $14,500. Pharoah has a December 31 year end and pro-rates depreciation to the nearest month. The actual machine usage was: 2,000 hours in 2023; 2,500 hours in 2024; 3,900 hours in 202 2,500 hours in 2026; and 1,100 hours in 2027. (a2) Prepare a depreciation schedule for the life of the asset under the double diminishing-balance method. (Round partial-period depreciation rate to 4 decimal palces, e.g. 15.2563% and other answers to O decimal places, e.g. 5,276.) Year 2023 2024 2025 2026 $ Carrying Amount Beginning of Year 134,860 Depr. Rate 50 % 50 % 50 % 50 % $ Depr. Expense Accum. Depr. End of Year Carrying Amount
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Transcribed Image Text:On April 22, 2023, Pharoah Enterprises purchased equipment for $134,860. The company expects to use the equipment for 11,800 working hours during its four-year life and that it will have a residual
value of $14,500. Pharoah has a December 31 year end and pro-rates depreciation to the nearest month. The actual machine usage was: 2,000 hours in 2023; 2,500 hours in 2024; 3,900 hours in 2025;
2,500 hours in 2026; and 1,100 hours in 2027.
(a2)
Prepare a depreciation schedule for the life of the asset under the double diminishing-balance method. (Round partial-period depreciation rate to 4 decimal palces, e.g. 15.2563 % and other answers to O
decimal places, e.g. 5,276.)
Year
2023
2024
2025
2026
$
Carrying Amount
Beginning of Year
134,860
Depr.
Rate
50 %
50 %
50 %
50 %
$
Depr.
Expense
$
Accum.
Depr.
End of Year
Carrying
Amount
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