Windsor Company acquired a plant asset at the beginning of Year 1. The asset has an estimatedservice life of 5 years. An employee has prepared depreciation schedules for this asset using threedifferent 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.Year12345TotalStraight-Line$12,42012,42012,42012,42012,420$62,100Sum-of-the-Years'-Digits Balance$20,70016,56012,4208,2804,140Double-Declining-$62,100$27,60016,5609,9365,9622,042$62,100What is the cost of the asset being depreciated?What amount, if any, was used in the depreciation calculations for the salvage value for this asset?

Depreciation :- The monetary value of an asset decreases over time due to use, wear and tear or…

Answered: What is the cost of the asset being…

What is the cost of the asset being depreciated? What amount, if any, was used in the depreciation calculations for the salvage value for this asset?

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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Question

Windsor 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
1
2
3
4
5
Total
Straight-Line
$12,420
12,420
12,420
12,420
12,420
$62,100
Sum-of-the-
Years'-Digits Balance
$20,700
16,560
12,420
8,280
4,140
Double-Declining-
$62,100
$27,600
16,560
9,936
5,962
2,042
$62,100
What is the cost of the asset being depreciated?
What amount, if any, was used in the depreciation calculations for the salvage value for this asset?

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