Question Wesley Co. purchased an equipment on April 1, 2013. It has an expected life of 20 years and no residual value. The company's financial year ended on December 31. The following expenditures were associated with the purchase: Cost of equipment Freight charges Sales taxes $120,000 5,200 7,800 27,000 Installation of equipment Required: (SHOW WORKINGS) Compute the depreciation expense for Years 2013 and 2014, using (i) the straight-line method with fractional years rounded to the nearest whole month; (ii) the 150% declining balance and using the half-year convention.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Wesley Co. purchased an equipment on April 1, 2013. It has an expected life of 20 years and
no residual value. The company's financial year ended on December 31. The following
expenditures were associated with the purchase:
Cost of equipment
Freight charges
Sales taxes
$120,000
5,200
7,800
27,000
Installation of equipment
Required:
(SHOW WORKINGS)
Compute the depreciation expense for Years 2013 and 2014, using
(i)
the straight-line method with fractional years rounded to the nearest whole month;
(ii)
the 150% declining balance and using the half-year convention.
Transcribed Image Text:Question Wesley Co. purchased an equipment on April 1, 2013. It has an expected life of 20 years and no residual value. The company's financial year ended on December 31. The following expenditures were associated with the purchase: Cost of equipment Freight charges Sales taxes $120,000 5,200 7,800 27,000 Installation of equipment Required: (SHOW WORKINGS) Compute the depreciation expense for Years 2013 and 2014, using (i) the straight-line method with fractional years rounded to the nearest whole month; (ii) the 150% declining balance and using the half-year convention.
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