Rembrandt Company acquired a plant asset at the beginning of Year 1. The asset has an estimated service life of 5 years. An employee has prepared depreciation schedules for this asset using three different methods to compare the results of using one method with the results of using other methods. You are to assume that the following schedules have been correctly prepared for this asset using (1) the straight-line method, (2) the sum-of-the-years'-digits method, and (3) the double-declining-balance method. Year Straight-Line Sum-of-the- Years'-Digits Double-Declining- Balance 1 $9,000 $15,000 $20,000 2 9,000 12,000 12,000 3 9,000 9,000 7,200 4 9,000 6,000 4,320 5 9,000 3,000 1,480 Total $45,000 $45,000 $45,000 Answer the following questions. (a) Your Answer Correct Answer Correct answer icon Your answer is correct. What is the cost of the asset being depreciated? Cost of asset $enter the Cost of asset in dollars eTextbook and Media Solution Attempts: 3 of 3 used (b) What amount, if any, was used in the depreciation calculations for the salvage value for this asset? Salvage value $enter the Salvage value in dollars eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer (c) The parts of this question must be completed in order. This part will be available when you complete the part above. (d) The parts of this question must be completed in order. This part will be available when you complete the part above. (e) The parts of this question must be completed in order. This part will be available when you complete the part above. (f) The parts of this question must be completed in order. This part will be available when you complete the part above.
Rembrandt Company acquired a plant asset at the beginning of Year 1. The asset has an estimated service life of 5 years. An employee has prepared depreciation schedules for this asset using three different methods to compare the results of using one method with the results of using other methods. You are to assume that the following schedules have been correctly prepared for this asset using (1) the straight-line method, (2) the sum-of-the-years'-digits method, and (3) the double-declining-balance method. Year Straight-Line Sum-of-the- Years'-Digits Double-Declining- Balance 1 $9,000 $15,000 $20,000 2 9,000 12,000 12,000 3 9,000 9,000 7,200 4 9,000 6,000 4,320 5 9,000 3,000 1,480 Total $45,000 $45,000 $45,000 Answer the following questions. (a) Your Answer Correct Answer Correct answer icon Your answer is correct. What is the cost of the asset being depreciated? Cost of asset $enter the Cost of asset in dollars eTextbook and Media Solution Attempts: 3 of 3 used (b) What amount, if any, was used in the depreciation calculations for the salvage value for this asset? Salvage value $enter the Salvage value in dollars eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer (c) The parts of this question must be completed in order. This part will be available when you complete the part above. (d) The parts of this question must be completed in order. This part will be available when you complete the part above. (e) The parts of this question must be completed in order. This part will be available when you complete the part above. (f) The parts of this question must be completed in order. This part will be available when you complete the part above.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Question
Rembrandt Company acquired a plant asset at the beginning of Year 1. The asset has an estimated service life of 5 years. An employee has prepared depreciation schedules for this asset using three different methods to compare the results of using one method with the results of using other methods. You are to assume that the following schedules have been correctly prepared for this asset using (1) the straight-line method, (2) the sum-of-the-years'-digits method, and (3) the double-declining-balance method.
Answer the following questions.
|
Year
|
Straight-Line
|
Sum-of-the-
Years'-Digits |
Double-Declining-
Balance |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1 | $9,000 | $15,000 | $20,000 | |||||||||
| 2 | 9,000 | 12,000 | 12,000 | |||||||||
| 3 | 9,000 | 9,000 | 7,200 | |||||||||
| 4 | 9,000 | 6,000 | 4,320 | |||||||||
| 5 | 9,000 | 3,000 | 1,480 | |||||||||
| Total | $45,000 | $45,000 | $45,000 |
Answer the following questions.
(a)
- Your Answer
- Correct Answer
Correct answer icon
Your answer is correct.
What is the cost of the asset being depreciated ?
| Cost of asset |
$enter the Cost of asset in dollars
|
eTextbook and Media
Solution
Attempts: 3 of 3 used
(b)
What amount, if any, was used in the depreciation calculations for the salvage value for this asset?
| Salvage value |
$enter the Salvage value in dollars
|
eTextbook and Media
Save for Later
Attempts: 0 of 3 used
Submit Answer
(c)
The parts of this question must be completed in order. This part will be available when you complete the part above.(d)
The parts of this question must be completed in order. This part will be available when you complete the part above.(e)
The parts of this question must be completed in order. This part will be available when you complete the part above.(f)
The parts of this question must be completed in order. This part will be available when you complete the part above.Expert Solution
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