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?
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?
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?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fefb0d3ec-bd0a-406a-9242-f4e6cbbfa6c3%2Fac2e4aa7-7ba2-4c24-8da0-5b62f14b9118%2Fvaw4ld_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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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