Units-of-Production Depreciation Method: Office Mart purchases a photocopier for $70,000. The photocopier has a salvage value of $7,000 and is expected to produce 787,500 copies over its life. Office Mart uses the units-of-production depreciation method and the expected copies per year for the eight years are: 115,000 copies. 119,250 copies. 124,000 copies. 114,250 copies. 111,250 copies. 105,750 copies. 98,000 copies. What is the depreciable cost per copy? (round to two decimal places and format per text) Calculate the year one depreciation expense. What is the year one book value? Calculate the year three depreciation expense. What is the year three book value? What is the year six accumulated depreciation?
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.
- 115,000 copies.
- 119,250 copies.
- 124,000 copies.
- 114,250 copies.
- 111,250 copies.
- 105,750 copies.
- 98,000 copies.
- What is the
depreciable cost per copy? (round to two decimal places and format per text) - Calculate the year one depreciation expense.
- What is the year one book value?
- Calculate the year three depreciation expense.
- What is the year three book value?
- What is the year six
accumulated depreciation ?
Double-Declining-Balance Depreciation Method: Office Mart purchases a photocopier for $70,000. The photocopier has a salvage value of $7,000 and has expected life of seven years. Office Mart uses the double-declining-balance depreciation method. (NOTE: Use the DDB Rate in the EXCEL spreadsheet and round the rate to three decimal places.)
- Calculate the year one depreciation expense.
- What is the year one book value?
- Calculate the year three depreciation expense.
- What is the year three book value?
- What is the year six accumulated depreciation?
- In what year is a "plug" amount used instead of the formula to calculate the depreciation expense? Year (just type the number)
- How much is that "plug" amount?
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