Required: 1. Determine the amount of depreciation expense for the three years ending December 31 by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining- balance method. Also determine the total depreciation expense for the four years by each method. Round the answer for each year to the nearest whole dollar. Depreciation Expense Units-of-Activity Double-Declining- Year Straight-Line Method Method Balance Method Year 1 Year 2 %24 Year 3 Year 4 Total 2. What method yields the highest depreciation expense for Year 1? 3. What method yields the most depreciation over the three-year life of the equipment?

Required: 1. Determine the amount of depreciation expense for the three years ending December 31 by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining- balance method. Also determine the total depreciation expense for the four years by each method. Round the answer for each year to the nearest whole dollar. Depreciation Expense Units-of-Activity Double-Declining- Year Straight-Line Method Method Balance Method Year 1 Year 2 %24 Year 3 Year 4 Total 2. What method yields the highest depreciation expense for Year 1? 3. What method yields the most depreciation over the three-year life of the equipment?

Name: Comparing Three Depreciation MethodsDexter Industries purchased packa
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Description: Comparing Three Depreciation MethodsDexter Industries purchased packaging equipment on January 8 for $240,200. The equipment was expected to have a useful life of four years, or 7,600 operating hours, and a residual value of$19,800. The equipment wa

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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For each of the following depreciable assets, determine the missing amount. Abbreviations for depreciation methods are SL for straight-line and DDB for double-declining-balance. Residual Service Life Depreciation Depreciation Asset Cost Value (Years) Method (Year 2) A $28,000 5 DDB $24,000 B 56,000 8 SL 5,300 C 81,000 6,000 SL 5,000 D 246,000 18,000 10 22,800 E 208,000 28,000 8 DDB
Required: State the effect (higher, lower, no effect) of accelerated depreciation relative to straight-line depreciation on a. Depreciation expense in the first year. b. The asset's net book value after two years. Cash flows from operations (excluding income taxes). с.
On January 1, 2023, a machine was purchased for $105,000. The machine has an estimated salvage value of $6,420 and an estimated useful life of 5 years. The machine can operate for 106,000 hours before it needs to be replaced. The company closed its books on December 31 and operates the machine as follows: 2023, 21,200 hours; 2024, 26,500 hours; 2025, 15,900 hours: 2026, 31,800 hours; and 2027, 10,600 hours. Compute the annual depreciation charges over the machine's life assuming a December 31 year-end for each of the following depreciation methods. (Round rate per hour to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 45,892.) 1. Straight-line Methodi $ 2. Activity Method Year 2023 2024 2025 $ 19,716 19,716 24,645 14,787
1. Determine the annual depreciation expense for each of the estimated 5 years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by (a) the straight-line method and (b) the double-declining-balance method. a. Straight-line method Additional Instruction Accumulated Depreciation, Year Depreciation Expense End of Year Book Value, End of Year 1 2 3 4 5 b. Double-declining-balance method Accumulated Depreciation, Year Depreciation Expense End of Year Book Value, End of Year 1 2 3 4 5 New lithographic equipment, acquired at a cost of $859,200 on March 1 at the beginning of a fiscal year, has an estimated useful life of 5 years and an estimated residual value of $96,660. The manager requested…
Which method of deprecation results in a lower amount for depreciation each year? ⒸA. Units of production B. Fixed instalment OC. Diminishing balance OD. Straight-line Previous page
A building acquired at the beginning of the year at a cost of $112,000 has an estimated residual value of $7,800 and an estimated useful life of four years. Determine the following. (a) The double-declining-balance rate (b) the double declining-balance depreciation for the first year
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Pharoah Company purchases equipment on January 1, Year 1, at a cost of $267,000. The asset is expected to have a service life of 5 years and a salvage value of $20,000.
If a fixed asset, such as a computer, were purchased on January 1 for $1,542 with an estimated life of 3 years and a salvage or residual value of $114, the journal entry for monthly expense under straight-line depreciation is O = Depreciation Expense. Ob Accumulated Depreciation Depreciation Expense Ос Accumulated Depreciation Depreciation Expense Od Accumulated Depreciation Accumulated Depreciation Depreciation Expense 39.67 476.00 476.00 39.67 39.67 476.00 476.00 39.67
Depreciation by Two Methods A storage tank acquired at the beginning of the fiscal year at a cost of $115,200 has an estimated residual value of $6,800 and an estimated useful life of four years. a. Determine the amount of annual depreciation by the straight-line method.$fill in the blank 1 b. Determine the amount of depreciation for the first and second years computed by the double-declining-balance method. Do not round the double-declining balance rate. If required, round your answers to the nearest dollar. Depreciation Year 1 $fill in the blank 2 Year 2 $fill in the blank 3
(c) Compute the amount of depreciation for each of Years 1 through 3 using the depreciation rate to 2 decimal places, e.g. 15.84% and final answers to 0 decimal places, e.g. 45,892.) Depreciation for Year 1 Depreciation for Year 2 Depreciation for Year 3 eTextbook and Media LA $ $ LA double-declining-balance method. (Round $ Assistance Us
A 4 Estimated Residual: 5 Estimated Life in years: 6 Estimated Life in hours: 7 Actual Hours: 8 Year 1 Year 2 9 10 11 12 14 15 16 17 18 19 Year 3 Year 4 20 21 22 23 $ B 10,000 Year 1 2 Prepare the following Straight Line depreciation schedule by using the excel SLN FUNCTION (fx) to calculate the 13 Depreciation Expense for Years 1-4 in the Depreciation Expense column. Enter formulas or absolute cell references for the remaining cells. W|N 3 4 1200 4 360 270 350 220 с D SULLIVAN RANCH CORPORATION Depreciation Schedule-Straight Line Method End of year amounts Depreciation Expense E Accumulated Depreciation LL Book Value F